Petrol gets notice of default on term notes demanding immediate payment

By Devika Patel

Knoxville, Tenn., April 15 - Petrol Oil and Gas, Inc. was notified on April 9 by LV Administrative Services, Inc., the agent for the holders of the company's secured term notes, that it is in default on the notes, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

According to the filing, Laurus Master Fund, Ltd., Valens Offshore SPV I, Ltd., Valens U.S. SPV I, LLC, Calliope Capital Corporation and Pallas Production Corp. are the holders of Petrol's $8 million secured convertible term note, which was sold in October 2004; its $10 million secured term note, which was sold in October 2005; its $5 million secured term note, which was sold in March 2006; and its $10 million secured term note, which was sold in May 2006.

The filing said that the notice of default demands immediate payment of all amounts due because of multiple events of default, including failure to make payments when due. It asserts that, as of April 8, total amount due is $34,881,420.09.

The notes are collateralized by substantially all of the company's assets, the filing said.

Based in Overland Park, Kan., Petrol is an oil and natural gas exploration company.

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