Transeuro Energy working to regain compliance with convertible clauses

By Angela McDaniels

Tacoma, Wash., March 28 - Transeuro Energy Corp. is not in compliance with two clauses of the bond agreement governing its 12% senior secured convertible bonds due 2015, according to a notice from bond trustee Norsk Tillitsmann ASA.

The company is out of compliance because its financial debt has exceeded C$1 million and the Beaver River field has been shut in due to an equipment failure and personnel have been de-manned until equipment can be mobilized. The company said this is unlikely to happen until it raises additional funds.

The company said it has been working toward a merger with another oil and gas company and to raise financing in order to remedy the noncompliance ahead of the annual interest payment due in May.

However, the company announced on March 10 that negotiations about the structure of the transaction have not been successful. The next day, the company asked the trustee for another two months to remedy the noncompliance.

The trustee is now asking the company for a plan on how it will regain compliance and for information about the company's current financial situation.

Transeuro Energy is a junior oil and gas exploration company based in Calgary, Alta.

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