Resaca gets firm commitment for $200 million revolver from Union Bank

By Sara Rosenberg

New York, Feb. 3 - Resaca Exploitation Inc. received a firm commitment on Wednesday for a new $200 million senior secured revolving credit facility due July 1, 2012, according to an S-4/A filed with the Securities and Exchange Commission.

Union Bank of North America is the lead bank on the deal.

Pricing on the revolver can range from Libor plus 250 basis points to 325 bps based on use.

The initial borrowing base under the revolver is expected to be $90 million.

The new revolver is being obtained in connection with Resaca's merger with Cano Petroleum Inc. and will be used to refinance bank debt at both companies, for oil and gas exploration and production, and for general corporate purposes.

Under the agreement, Cano shareholders will receive 2.1 shares of Resaca common stock for every share of Cano common stock and will own about 50% of the combined company.

The combined oil and gas company will retain the Resaca name and will have headquarters in Houston.

Closing is subject to shareholder approval by both companies, Resaca becoming listed on the NYSE Amex, the refinancing of existing bank debt and other customary conditions.

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