NiMin Energy Corp. (TSX: NNN, OTCQX: NEYYF) – Signs term sheet for long-term debt; Success on the very first well at Wyoming

Investment Highlights

  • On April 12, 2010, the company announced the execution of a preliminary term sheet for a 5-year senior secured loan for $36 million (with the potential to be increased to $75 million). This is a very positive development as one of our major concerns at the time of our initiating report was whether the company would be able to raise enough capital to pay off its $22 in million short-term debt. The new long-term debt would significantly improve the company's balance sheet/liquidity position, and enable the company to easily fund its capital budget programs in 2010 and 2011.

  • The first well of the 12 well programs in Wyoming turned out to be successful, and was brought on-line in March 2010. Initial production (100 bopd gross) and completion costs ($0.85 – $0.90 million) were in line with expectations.
  • In February 2010, the company reported increased flow rates and API gravity from its Combined Miscible Drive (CMD) project at its Pleito Creek Field in California. Management expects to determine the commercial viability of the CMD process by the end of this year.
  • For the 12 month period ended December 2009, the company reported net production revenues of $6.08 million, which were very close to our forecast of $6.04 million. Operating netbacks were disappointing due to the initiation of the CMD project.
  • Current production is 900 (gross), up from 820 (gross) at the time of our initiating report. We have raised our production and revenue forecasts for FY2010.

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