CALGARY, ALBERTA--(Marketwired - July 18, 2016) - ROOSTER ENERGY LTD. (or the "Company") (www.roosterenergyltd.com) (TSX VENTURE:COQ) today announces that effective June 30,
2016, it entered into a Second Amendment and Waiver to the Amended and Restated Note Purchase Agreement (the "Second
Amendment") pursuant to which it issued senior secured notes in the amount of US$60 million (the "Notes") due on June 25,
2018.
The Notes are secured by a first priority security interest, lien and mortgage on all of the assets of the Company. Pursuant
to the Second Amendment, the EBITDA and leverage ratio covenants of the credit facility are waived for the fiscal quarter ending
September 30, 2016, and the asset coverage ratio covenant is waived for the fiscal quarter ending December 31, 2016. The
scheduled loan amortization has been waived for the remainder of fiscal year 2016, and replaced with a requirement for principal
repayments summing to no less than $7,532,000 for the six months ending December 31, 2016. The Notes will continue to bear
interest at a rate equal to Libor + 11.5% per annum (minimum of 13.0%) with interest payments due monthly; the Notes will also
continue to bear additional interest for the term of the term of the waiver period at the rate of eight percent (8.0%) per annum
that shall be payable in kind. Lastly, the Company has agreed to enter into fixed price commodity swap agreements covering
50% of its estimated proved developed producing natural gas production for a 24 month period, thru August 2018.
The Company is also pleased to announce that it has entered into a new decommissioning contract in the Gulf of
Mexico. Total revenues under the "lump sum" contract will be approximately $22 million when the work is completed. The work
is scheduled to commence in August, 2016.
Robert P. Murphy, Chief Executive Officer, commented, "the Second Amendment demonstrates our lenders' confidence in the
Company's ability to implement its unique strategy during this low commodity price environment. This new contract reflects
the demand for creative business solutions for decommissioning oil and gas fields and will provide a beneficial source of revenue
in 2016. Additionally, the Company continues to evaluate new business opportunities from both the production and decommissioning
arenas during this unique, but challenging, time in our industry."
If the Company is unable to restructure the financial and performance covenants of the credit facility or extend the term of
the waiver on or before the end of the fiscal quarter ending December 31, 2016, then the Company may be in default of one or more
of the covenants and in that event the holders of the Notes may exercise their remedies against the Company. No assurances
can be given that the Company will be able to reach agreement with the holders of the Notes on the consequences of any possible
default at that time and in that event the Company may not be able to continue as a going concern.
ABOUT ROOSTER ENERGY LTD.
Rooster Energy Ltd. is a Houston, Texas, based vertically integrated oil and gas exploration production company combined with
a well service intervention/plugging and abandonment subsidiary focused in the shallow waters of the U.S. Gulf of Mexico. Our
primary oil and gas assets consist of producing oil and gas wells located on US federal and state oil and gas leases and service
company assets consisting of rigless well plugging and abandonment/intervention units.
Investors are welcome to visit our website at www.roosterenergyltd.com.
Forward Looking Information and Statements
Certain statements and information in this press release may constitute "forward-looking information" or statements as
such terms are used in applicable Canadian securities laws. Any statement that expresses, involves or includes expectations of
the anticipated benefits of the refinancing or modification of existing debt or future operations (including drill rig
commitments and use of proceeds), commerciality of any hydrocarbon discovered, production rates, operating costs, commodity
prices, administrative costs, commodity price risk and other components of cash flow and earnings, management activity,
acquisitions and dispositions, capital spending, access to credit facilities taxes, regulatory changes, projections, objective,
assumptions or future events that are not statements of historical fact should be viewed as "forward-looking statements". Events
or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown
risks, uncertainties, and other factors, many of which are beyond the control of the Company. These risks include, but are not
limited to, the risks associated with the oil and gas industry, commodity prices, and interest and exchange rate changes.
Industry related risks could include, but are not limited to, operational risks in exploration, development and production,
delays or changes in plans, risks associated with the uncertainty of reserve estimates, or reservoir performance, health and
safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to
place undue reliance on any forward-looking statement in this press release. The Company disclaims any intention or obligation to
update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as
required by applicable law.
Financial outlook information contained in this press release about the Company's prospective cash flows and/or financial
position is based on assumptions about future events, including economic conditions and proposed courses of action, based on
management's assessment of the relevant information currently available. Readers are cautioned that any such financial outlook
information contained herein should not be used for purposes other than for which it is disclosed herein.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE
TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.