CALGARY, ALBERTA--(Marketwired - Feb. 6, 2017) - ROOSTER ENERGY LTD. (or the "Company") (www.roosterenergyltd.com) (TSX VENTURE:COQ) today announces that effective February
3, 2017, it entered into a Limited Forbearance and Reservation of Rights Agreement (the "Forbearance Agreement") with the
holders of the senior secured notes (the "Notes") issued pursuant to the Amended and Restated Note Purchase Agreement dated as of
November 17, 2014 as amended and restated as of June 25, 2015 (the "Second Amendment"). The Notes are secured by a first
priority security interest, lien and mortgage on all of the assets of the Company. As previously reported, the Company
received a notice of default for non-compliance with certain covenants of the Second Amendment and that it was operating under a
waiver of same that expired on December 31, 2016.
Pursuant to the Forbearance Agreement, the holders of the Notes have agreed to forbear from exercising certain of their rights
and remedies under the Second Amendment during a standstill period that terminates on March 3, 2017, or earlier if there is a
default of the terms of the Forbearance Agreement or if an acceptable restructuring agreement of the obligations of the Company
under the Second Amendment is reached with the holders of the Notes. In consideration of the Forbearance Agreement, among
other things, the Company agreed that from January 1, 2017, until termination of the Forbearance Agreement, in addition to the
applicable rate of interest due on the Notes, additional interest at 8% per annum shall be payable in kind and a forbearance fee
in an amount equal to 50 basis points of the aggregate principal amount of the Notes outstanding shall be payable in
kind. To the extent that an acceptable restructuring agreement is reached prior to the expiration of the standstill period,
both the additional interest and the forbearance fee shall be waived. Additionally, upon execution of the Forbearance
Agreement, the Company paid the sum of US$2.5 million that has been applied to reduce the principal amount of the Notes. As
of this date, the principal balance due under the Notes is approximately US$54.7 million.
During the standstill period, the Company will conduct business as usual and intends to continue in negotiations with the
holders to restructure the terms and conditions of the Second Amendment and its obligations thereunder. However, if the
Company is unable to restructure the financial and performance covenants of the credit facility or extend the term of the
standstill period before expiration, then the holders of the Notes may exercise their remedies against the Company. In that
event, the Company will in all likelihood seek relief under applicable bankruptcy or reorganization laws to preserve the going
concern value of the Company.
ABOUT ROOSTER ENERGY LTD.
Rooster Energy Ltd. is a Houston, Texas, based vertically integrated oil and gas 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
business is a service company whose assets consist of rigless well plugging and abandonment/intervention units and our oil and
gas assets consist of producing oil and gas wells located on US federal oil and gas leases. 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.