AOG Aurora Oil & Gas Corp.

TRAVERSE CITY, Mich., June 12 /PRNewswire-FirstCall/ -- Aurora Oil & Gas Corporation (AMEX:AOG) today announced that it has successfully negotiated and entered into waiver and forbearance agreements on its senior secured credit facility and second lien term loan agreements. Earlier this year, the Company announced that its existing capital structure was not adequate to fund its anticipated growth and thereafter embarked on a recapitalization effort whereby the existing debt structure would be replaced with a more flexible capital structure, to include revised loan agreements and new project financing. In the interim, Aurora has worked to maintain its operations through existing cash balances, cost reductions and internally generated cash flows from sales of oil and natural gas production. On April 29, 2008, Aurora management reported to BNP and the syndicate of associated lenders ("the Lenders") that it failed to meet certain covenants required by its loan agreements. According to the agreements, the Company was allowed a 30 day period to remediate the failures in order to avoid an event of default. At that time, the Company also began negotiations for a waiver in the event it was unsuccessful with its remediation efforts. After the period was completed, it was determined that the remediation efforts did not sufficiently address the covenant failures. On June 6, 2008, the Lenders informed the Company that it had redetermined the Company's borrowing base to be $50 million. As a result, there was a potential deficiency of as much as $20 million. According to the loan agreements, the Company must repay any deficiency in three equal monthly installments within 90 days of notification. On June 12, 2008, the Company completed negotiations and entered into waiver and forbearance agreements, effective June 2, 2008. The Lenders, in exchange for interest rate increases and other non-financial concessions, have permanently waived any defaults or events of default resulting from the non- compliance with any covenants on or before March 31, 2008. In addition, the Lenders have agreed to forbear any further actions, including any payment of borrowing base deficiency until after August 15, 2008. For further details regarding the terms of the waiver and forbearance agreements, see the Form 8-K exhibits, filed on June 12, 2008. Mr. William W. Deneau, Chief Executive Officer, commented, "Though our preferred outcome was full remediation of covenant failures, we are satisfied with this arrangement with our Lenders. At this time, we are in advanced negotiations with several parties that offer beneficial financial alternatives to the Company. We believe that our efforts over the next two months will result in a solution that not only resolves the financial inflexibility we are experiencing, but will also establish a sound capital structure from which we can continue development of our large undeveloped asset base." About Aurora Oil & Gas Corporation Aurora Oil & Gas Corporation is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky, and the Woodford Shale of Oklahoma. Cautionary Note on Forward-Looking Statements Statements regarding future events, occurrences, circumstances, activities, performance, outcomes, beliefs and results, including future revenues, reduction in costs, the procurement of new credit facilities, perceived benefits from financial alternatives, anticipated capital availability and expenditures, and plans for future growth through drilling and production are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although we believe that the forward-looking statements described are based on reasonable assumptions, we can give no assurance that they will prove accurate. Important factors that could cause our actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, drilling and operating risks, the availability of drilling rigs, changes in laws or government regulations, unforeseen engineering and mechanical or technological difficulties in drilling the wells, operating hazards, weather- related delays, the loss of existing credit facilities, availability of capital, and other risks more fully described in our filings with the Securities and Exchange Commission. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise. Join our email distribution list: http://www.b2i.us/irpass.asp?BzID=1419&to=ea&s=0 Contact: Aurora Oil & Gas Corporation Jeffrey W. Deneau, Investor Relations (231) 941-0073 http://www.auroraogc.com/ DATASOURCE: Aurora Oil & Gas Corporation CONTACT: Jeffrey W. Deneau, Investor Relations, Aurora Oil & Gas Corporation, +1-231-941-0073 Web site: http://www.auroraogc.com/

Copyright