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Storm Cat Energy Secures Revolving Line of Credit
Tuesday, August 1, 2006
CALGARY and DENVER (PR Newswire) - August 1, 2006 Storm Cat Energy Corporation
(AMEX: SCU; TSX:
SME)
today announced that it has closed a revolving line of credit facility led by JPMorgan Chase Bank, N.A. providing for a credit line of up to US$250
million. Loans made under the revolving credit agreement are secured by mortgages on the Companys oil & gas properties and guaranteed by Storm
Cats Powder Basin assets.
Each loan bears interest at a Eurodollar rate or a base rate, as requested by Storm Cat, plus an applicable percentage based on Storm Cat's usage
of the facility. In addition, under the terms of the US$250 million credit agreement, Storm Cat will pay a commitment fee quarterly in arrears
based on a percentage multiplied by the daily amount that the aggregate commitments exceed borrowings under the agreement. Storm Cat did not borrow
any funds at the time of execution of the credit agreement.
The credit facility is available to provide funds for the exploration, development and/or acquisition of oil and gas properties and for working
capital and other general corporate purposes. Interest on funds drawn will be paid monthly with the principal due August 2010. The agreement
provides for semi-annual evaluation of the borrowing base, which will be determined as a percentage of the discounted present value of the
Companys oil and natural gas reserves.
This revolving line of credit is an important financial instrument that we can use to further our growth said Scott Zimmerman, Storm Cats Chief
President and CEO. While there are numerous competent choices in energy lenders, we believe that by establishing our relationship with JPMorgan
Chase Bank, N.A., we can leverage both their expertise and financial strength. With this credit facility, which is tied to our reserve base, we are
further capable of funding our drilling and completion plans in our core operating areas of the US and Canada.
About Storm Cat Energy Corporation
Storm Cat Energy is an independent oil and gas company focused
on the pursuit, exploration and development of large unconventional gas reserves from fractured shales, coal beds
and tight sand formations. The Company has producing properties in Wyoming's Powder River Basin, exploration and
development acreage in Canada, Arkansas and Alaska. The Company's shares trade on the American Stock Exchange
under the symbol "SCU" and in Canada on the Toronto Stock Exchange under the symbol "SME."
By Order of the Board of Directors
Storm Cat Energy Corporation
J. Scott Zimmerman
President and Chief Executive Officer
Company Contact:
Scott Zimmerman, President and Chief Executive Officer
Paul Wiesner, Chief Financial Officer
Phone: 87-STORMCAT
www.stormcatenergy.com
Forward-looking Statements
CAUTIONARY STATEMENT: This press release contains certain forward-looking statements, as defined in the United States Private Securities
Litigation Reform Act of 1995 relating to matters such as the Companys drilling and other exploration plans and projected well economics.
Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words
expects, plans, anticipates, believes, intends, estimates, projects, aims, potential, goal, objective, prospective,
and similar expressions, or that events or conditions will, would, may, can, could or should occur. Forward-looking statements
are based on the beliefs, estimates and opinions of Storm Cats management on the date the statements are made; including production and
reserve estimates, and potential benefits to Storm Cat of such acquisitions; they involve a number of risks and uncertainties.
Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. Storm Cat undertakes no obligation to update these forward-looking
statements if managements beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results
to differ materially from those anticipated in these forward-looking statements include, but are not limited to receipt of necessary
approval from regulatory bodies, the failure to achieve the anticipated benefits of the acquisition, the failure to close the
acquisition, the volatility of natural gas prices, the possibility that exploration efforts will not yield economically recoverable
quantities of gas, accidents and other risks associated with gas exploration and development operations, the risk that the Company
will encounter unanticipated geological factors, the Companys need for and availability of additional financing, the possibility
that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Companys
exploration and development plans, and the other risk factors discussed in greater detail in the Companys various filings on
SEDAR (www.sedar.com) with Canadian securities regulators and its filings with the U.S. Securities and
Exchange Commission, including the Companys Form 20-F for the fiscal year ended December 31, 2005.
NO STOCK EXCHANGE HAS REVIEWED OR ACCEPTED RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS NEWS RELEASE.
Source:
Storm Cat Energy Corporation
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