Energy Corp. of America to repay 9½% notes, bank debt with royalty trust IPO proceeds

New York, April 5 - Energy Corp. of America said it plans to use $92.0 million of the proceeds from an initial public offering of units in Appalachian Gas Royalty Trust to repay its 9½% senior subordinated notes due 2007.

Remaining proceeds will be used to repay borrowings under Energy Corp.'s revolving credit facility and for general corporate purposes. As of Dec. 31, 2004, the company had $35.4 million of revolver borrowings outstanding.

In the IPO, Appalachian Gas plans to raise up to $162.75 million in its sale of units via bookrunner Raymond James.

At the closing of the IPO, Energy Corp. will transfer to Appalachian Gas royalty interests in 312 producing gas wells in West Virginia, Pennsylvania and Kentucky plus royalty interests in all of the current lease acreage in two specified geographic areas in West Virginia and Kentucky, excluding its interests in existing producing wells and associated assets.

Energy Corp. will also transfer part of some natural gas floor price contracts relating to the production.

In return Energy Corp., a privately held oil and gas exploration and production company, will receive all the net proceeds of the IPO.

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