Houston-based Greka Energy Corp. increased its five-year credit facility with GMAC and completed a new revolving credit line with Bank of Texas to replace an existing credit line the company had with Canadian Imperial Bank of Commerce. Jim Blackman, director of investor relations, said the company opted for a facility with Bank of Texas rather than refinance with CIBC because the new bank was willing to increase the facility level from $7 million to $16 million and provide less restrictive covenants allowing the company to pursue an acquisition plan this year. "We needed more money to make strategic acquisitions," said Blackman, explaining that the company is eyeing properties in Louisiana for future drilling opportunities. "Bank of Texas is also willing to provide more funding if we prove up the reserves," he added.
The company's new $46 million facility with GMAC, which is up from the original $35 million, is priced at U.S. prime rate plus 1%--the same as the original credit. The new $16 million credit provided by Bank of Texas is also priced at U.S. prime plus 1%. Blackman said Bank of Texas also offered slightly more competitive pricing, but he declined to state pricing on the old CIBC credit.