Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
___________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported): July
27, 2006
Storm
Cat Energy Corporation
(Exact
Name of Registrant as Specified in Charter)
|
British
Columbia, Canada
|
001-32628
|
06-1762942
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
1125
17th
Street, Suite 2310, Denver, Colorado 80202
(Address
of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number, including area code: (303) 991-5070
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
£
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
1.01. Entry
into a Material Definitive Agreement.
On
July
28, 2006, Storm Cat Energy Corporation (“Storm Cat”) and Storm Cat Energy (USA)
Corporation (“Storm Cat (USA)”), a wholly owned subsidiary of Storm Cat, entered
into a Credit Agreement (the “US Credit Agreement”), with JPMorgan Chase Bank,
N.A., as Global Administrative Agent, and the Lenders party thereto.
Additionally, on July 28, 2006, Storm Cat entered into a Credit Agreement (the
“Canadian Credit Agreement”), with JPMorgan Chase Bank, N.A., Toronto Branch as
Canadian Administrative Agent, JPMorgan Chase Bank, N.A., as Global
Administrative Agent, and the Lenders party thereto. The US Credit
Agreement and the Canadian Credit Agreement are collectively referred to herein
as the “Credit Agreements” or the “Senior Credit Facility.”
Storm
Cat
may borrow up to an aggregate principal amount of U.S.$250,000,000 under the
Senior Credit Facility that may be allocated between each of the Credit
Agreements depending on the respective borrowing base under each such Credit
Agreement. Storm
Cat
did not borrow any funds at the time of execution of the Senior Credit Facility.
The
Senior 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. The Credit Agreements provide for a
semi-annual evaluation of the borrowing base, which has been set initially
at
U.S.$11,000,000, that will be determined as a percentage of the discounted
present value of Storm Cat’s oil and natural gas reserves.
Each
loan
under the Senior Credit Facility bears interest at a base rate or
a Eurodollar rate, as requested by Storm Cat, plus an applicable percentage
based on Storm Cat's usage of the facility. The applicable margin above the
base
rate ranges from 0% to 0.50% and the applicable margin above the Eurodollar
rate ranges from 1.25% to 2.00%, in each case depending on Storm Cat’s
usage under the credit line. In addition, Storm Cat will pay a commitment fee
quarterly in arrears ranging from 0.30% to 0.50% per annum on the total amount
of the unused commitments. Interest
on funds drawn will be paid monthly with the principal due on the maturity
date,
July 28, 2010.
The
Senior Credit Facility contains affirmative and negative covenants (including
limitations on indebtedness,
liens, investments, loans and advances, dividends, distributions and
redemptions, sales and leasebacks, nature of business, hedging agreements,
leases, mergers, use of proceeds of loans and letters of credit, ERISA
compliance, discount of receivables, sale of oil and gas properties,
environmental matters, transactions with affiliates, subsidiaries, and negative
pledge agreements, in each case subject to carveouts and/or baskets mutually
agreed upon by the parties)
that
are customary for a facility of this nature. The Senior Credit Facility also
contains customary representations and warranties (including those relating
to
corporate
existence, financial condition, litigation, absence of defaults, authority
and
enforceability, approvals, use of proceeds and letters of credit, ERISA, taxes,
title to property, no material misstatements, Investment Company Act status,
subsidiaries, location of business and offices, defaults, environmental matters,
compliance with laws, insurance, hedging agreements, restriction on liens,
material agreements, and solvency) and
customary events of default (including those relating to monetary defaults,
covenant defaults, cross defaults and bankruptcy events). The Senior Credit
Facility contains two financial covenants: (1) Storm Cat will
not
permit its Current Ratio (defined as consolidated current assets plus unused
availability under the Global Borrowing Base divided by consolidated current
liabilities excluding the current portion of the Credit Agreements) as of the
last day of any fiscal quarter, commencing with the fiscal quarter ending
December 31, 2006, to be less than 1.0 to 1.0,
and (2)
Storm Cat will
not
permit its ratio of consolidated Total Funded Debt to consolidated EBITDA
(calculated quarterly at the end of each fiscal quarter, with such quarter
EBITDA to be annualized by multiplying by four (4)) as of the end of any fiscal
quarter, commencing with the fiscal quarter ending December 31, 2006, to be
greater than (a) 3.50 to 1.00 for the fiscal quarters ending December 31, 2006
and March 31, 2007, (b) 3.00 to 1.00 for the fiscal quarter ending June 30,
2007
and for each fiscal quarter thereafter.
Storm
Cat
and the subsidiary guarantors have also executed and delivered certain other
related agreements and documents pursuant to the Senior Credit Facility,
including facility guaranty agreements, pledge agreements, and a mortgage.
The
obligations of Storm Cat and its operating subsidiaries under the Senior Credit
Facility are secured by a first priority security interest in favor of the
Global Administrative Agent for the benefit of the lenders, in Storm Cat’s and
such subsidiaries’ material tangible and intangible assets, and proved reserves,
among other things.
On
August
1, 2006, Storm Cat announced the closing of its new Credit Facility in a news
release that is filed as Exhibit 99.1 to this Current Report on Form 8−K and
incorporated herein by reference.
The
foregoing is qualified in its entirety by reference to the U.S. Credit Agreement
and the Canadian Credit Agreement, conformed copies of which are attached
hereto
as Exhibits 10.1 and 10.2, respectively, and incorporated herein by
reference.
Item
2.02. Results
of Operations and Financial Condition.
On
July
27, 2006, Storm Cat issued a news release announcing its operational highlights
for its second quarter ended June 30, 2006. A copy of the new release is
furnished to the United States Securities and Exchange Commission with this
Current Report on Form 8-K as Exhibit 99.2.
Item
2.03. Creation
of a Direct Financial Obligation or on Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The
information set forth above under Item 1.01 of this Current Report on Form
8-K
is incorporated herein by reference.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits.
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Exhibit
No.
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|
Description
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|
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10.1
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|
Credit
Agreement, dated as of July 28, 2006, among Storm Cat Energy (USA)
Corporation, Storm Cat Energy Corporation, the Lenders Party Hereto
and
JPMorgan Chase Bank, N.A., as Global Administrative
Agent
|
| |
|
|
|
10.2
|
|
Credit
Agreement, dated as of July 28, 2006, among Storm Cat Energy Corporation,
the Lenders Party Hereto, JPMorgan
Chase Bank, N.A., Toronto Branch as Canadian Administrative
Agent,
and JPMorgan
Chase Bank, N.A., as Global Administrative Agent
|
| |
|
|
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99.1
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P
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News
Release, dated August 1, 2006.
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| |
|
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99.2
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P
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News
Release, dated July 27, 2006.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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|
|
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STORM
CAT ENERGY
CORPORATION |
|
|
|
| Date:
August 2, 2006 |
By: |
/s/
Paul Wiesner |
| |
Name:
Paul Wiesner |
| |
Title:
Chief Financial Officer |
Exhibit
Index
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Exhibit
No.
|
|
Description
|
|
|
|
|
|
10.1
|
|
Credit
Agreement, dated as of July 28, 2006, among Storm Cat Energy (USA)
Corporation, Storm Cat Energy Corporation, the Lenders Party Hereto
and
JPMorgan Chase Bank, N.A., as Global Administrative
Agent
|
| |
|
|
|
10.2
|
|
Credit
Agreement, dated as of July 28, 2006, among Storm Cat Energy Corporation,
the Lenders Party Hereto, JPMorgan Chase Bank, N.A., Toronto Branch
as
Canadian Administrative Agent, and JPMorgan Chase Bank, N.A., as
Global
Administrative Agent
|
| |
|
|
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99.1
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P
|
News
Release, dated August 1, 2006.
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99.2
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P
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News
Release, dated July 27, 2006.
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