Coho Energy Announces Expiration of Letter of Intent for Sale of Mississippi Properties; Continues Sales Discussions to Use Proceeds to Cure Borrowing Base Deficiency.Business Editors DALLAS--(BUSINESS WIRE)--Nov. 6, 2001 Coho Energy, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CHOH CHOH Chesapeake and Ohio Canal National Historic Park (US National Park Service) ) announced today that its non-binding letter of intent for the sale of its Mississippi oil and gas assets, announced on September 14, 2001, expired pursuant to its terms. Although, discussions regarding the sale are continuing with the third party that had executed the letter of intent, the Company has reinitiated discussions with other potential purchasers of the Company's oil and gas assets. The Company may not be able to reach an agreement for the sale of its oil and gas assets, and even if an agreement is reached, a sale may not be consummated. On November 2, 2001, The Chase Manhattan Bank The Chase Manhattan Bank, now part of JPMorgan Chase, was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in New York City. , as the administrative agent under the Company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, notified the Company of a borrowing base deficiency as of November 1, 2001 as a result of the redetermination Noun 1. redetermination - determining again determination, finding - the act of determining the properties of something, usually by research or calculation; "the determination of molecular structures" of the borrowing base to $175 million. Outstanding borrowings under the credit facility are currently $195 million. Under the terms of the credit facility, the Company must cure the borrowing base deficiency within 90 days of receipt of the administrative agent's notification. The Company intends to cure the borrowing base deficiency by selling a portion of its oil and gas assets and to apply the sales proceeds to reduce its outstanding borrowings under the credit facility. The Company may not be able to consummate a sale or sales of a portion of its oil and gas assets to cure the borrowing base deficiency within the prescribed 90-day period in which case an event of default under the credit facility would occur. The Company intends to explore other available alternatives to avoid a default under its revolving credit facility if the Company is unable to cure the deficiency pursuant to a property sale. Coho Energy, Inc. is a Dallas based oil and gas producer focusing on exploitation of underdeveloped un·der·de·vel·oped adj. Not adequately or normally developed; immature. oil properties in Oklahoma and Mississippi. |
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