| ||July 19, 2010|
$7.5 MILLION GAS LINKED DEBENTURE ISSUE
| ||Vancouver, British Columbia, July 19, 2010 - Thunderbird Energy Corp. (TSX-V: TBD) (the "Company") today announced that it is conducting a non-brokered financing of up to $7.5 million principal amount of secured, natural gas linked debentures (the "Debentures") to be sold to accredited investors. |
The Debentures will have a three year term and earn a base interest rate of 15% per annum, with quarterly rate adjustments whereby the interest rate payable will be increased by one percent (1%) for each $0.50 increase in the average price of natural gas (Henry Hub) above $5.00, subject to a maximum of 25%. Interest will be payable fifty percent (50%) in cash and fifty percent (50%) in common shares of Thunderbird. The Thunderbird shares will be priced at a 10% discount to the market price of Thunderbird's shares at the time of issuance, subject to a minimum price of $0.15 per share.
Purchasers of the Debentures will also receive three year warrants to purchase additional common shares of Thunderbird on the basis of one warrant for every $0.50 principal amount of Debentures purchased. The warrants will be exercisable at a price of $0.30 in year one, $0.40 in year two and $0.50 in year three. Proceeds of the Debenture issue will be used to retire the Company's existing credit facility with Macquarie Bank and for working capital.
Holders of the Debentures will receive a first position security interest in the Company's Gordon Creek, Utah natural gas field. As disclosed in the Company's news release, dated May 17, 2010, MHA Petroleum consultants of Denver, Colorado recently completed an evaluation of the Company's Gordon Creek reserves in accordance with National Instrument 51-101 that resulted in an increase of the estimated 2P reserve valuation to US $49.7 million.
Insiders of Thunderbird and their associates anticipate purchasing approximately 25% of the Debenture issue.
Although the financing is non-brokered, Thunderbird will pay a commission to agents that arrange for the sale of Debentures equal to 7.5% of the gross proceeds raised. The completion of the Debenture issue is subject to certain conditions including the receipt of all required regulatory approvals.
Thunderbird Energy is a Canadian based oil and gas exploration and production Company with interests in the US Rockies and mid-continent regions. Thunderbird's holdings include the Gordon Creek, Utah natural gas field, the Rush County, Kansas light oil project and a light oil exploration project in Weston County Wyoming.
For more information, contact:
President and CEO
847 Hamilton Street
Vancouver, B.C. V6B 2R7
Rick J. Ironside, P. Eng MBA
Chief Operating Officer
1010 1st Street S.W. Suite 550
Calgary, Alberta T2R 1K4
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