Teton Energy secures amendments to loan and forbearance agreement

By Caroline Salls

Pittsburgh, Sept. 1 - Teton Energy Corp. has entered into a third amendment to the credit agreement and forbearance agreement with JPMorgan Chase Bank, NA, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Under the amendment:

• The company's pre-existing borrowing base capacity was decreased to $14 million from $20 million until the next scheduled redetermination;

• The lenders agreed to forbear from exercising their rights related to a default for failing to repay an Aug. 25 $8.48 million borrowing base deficiency through 5 p.m. ET on Sept. 15;

• Any payments due under the loan documents on and after Aug. 25 are subject to a post-default interest rate of 2% plus the previous applicable rate;

• Teton agreed to obtain fully executed account control agreements covering all of its deposit accounts; and

• The company agreed to continue to explore strategic alternatives, including raising additional capital, merger reorganization, restructuring or sale of all or substantially all of the assets of the company and its subsidiaries.

Teton is a Denver-based developer, producer and marketer of natural gas and oil properties.

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