5. Long Term Debt

9 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

5. Long Term Debt

5. Long Term Debt

On December 21, 2012, the Company entered into a $25 million senior secured revolving bank credit facility (the “Credit Facility”) the Bank of Oklahoma (the “Bank”). The initial borrowing base on the Credit Facility is $6 million. The maturity date of the Credit Facility is December 21, 2017. The Credit Facility is secured by mortgages on certain Company properties and an assignment of all the proceeds from severed and extracted hydrocarbons from the properties described in the mortgages. Until further notice, the Bank has suspended their right to receive the proceeds directly.

The Credit Facility contains certain affirmative and negative covenants, including restrictions on indebtedness and dividends, and requirements with respect to working capital and interest coverage ratios. As of December 31, 2012, the Company is in compliance with all of the financial covenants under the Credit Facility.

Payments of interest are due quarterly in arrears at prime plus 0.75% to 1.75% or LIBOR plus 1.75% to 2.75%, depending on the Company's level of borrowing and election at the date of borrowing. Commitment fees on the unused amounts of the Credit Facility are due quarterly at rates from 0.35% to 0.50% on the unused amounts of the Credit Facility. At closing, the Company paid a borrowing base fee of $30,000, or 0.5%, on the $6 million borrowing base. These costs have been recorded as deferred financing costs and will be amortized over the term of the note. Additional borrowing base fees may be payable upon future increases in the borrowing base, if any. As of December 31, 2012, the Company had an outstanding balance under the Credit Facility of $2 million.