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Lower Latham Reservoir Company <br />January 19, 2010 (UPDATED February 4, 2010) <br />Page 6 of 7 <br />TABLE 3 <br />FINANCIAL SUMMARY <br />Agenda Item 26a <br />Creditworthiness: The Company has two existing loans with the CWCB for phases I and II of the <br />Project. The phase I loan has a remaining balance of $1,898,878 ($92,149 due annually). The <br />phase II loan has a remaining balance of $654,712 ($30,983 due annually). Both loans were <br />secured by a pledge of revenues from oil and gas royalties, a pledge of future assessments as may <br />be required by the Company, and the water rights purchased with the CWCB proceeds. If the oil <br />and gas revenues do not meet expenses, shareholder assessments will be levied to cover the CWCB <br />debt service. <br />The Company obtained a line-of-credit bridge loan from the Bank of Colorado in the amount of <br />$2,000,000. This full amount was draw� to facilitate the purchase of the water rights and land <br />associated with the recharge facilities at the Klein farm. The interest rate on the loan is equal to the <br />national prime rate, with a floor rate of 5.0%. As a contract condition, the Company will be <br />required to pay off the balance of the bridge loan with the CWCB loan. <br />*Company revenues are generated from oil and gas royalties from wells located on Company <br />owned property. <br />