Aurora Oil & Gas Limited announces pricing of senior notes offering; adjustment in revolver borrowing base

PERTH, Australia, Feb. 1, 2012 /CNW/ - Aurora Oil & Gas Limited (TSX: AEF) (ASX: AUT) today announced the pricing of its previously announced private offering of an aggregate principle amount of US$200 million in senior unsecured notes. The senior notes, to be issued by a wholly owned subsidiary of Aurora and guaranteed by Aurora and each of the subsidiaries of the issuer, will bear interest at 9.875% per annum and are due in February 2017, and will have an issue price of 98.552%.  Aurora intends to use net proceeds from the proposed note offering to fund capital expenditures for development of its holdings in the Eagle Ford shale trend (together with other sources of liquidity) and for other general corporate purposes, including financing potential future acquisitions of oil and natural gas interests in its core areas.  The closing of the offering of notes, which is subject to customary conditions, is expected to occur on February 8, 2012

In connection with the offering, and pursuant to the terms of Aurora's revolving credit facility, Aurora and the lenders under the revolving credit facility have agreed to a reduction in the initial borrowing base thereunder from US$85 million to US$35 million, effective upon closing of the senior note offering.  The borrowing base will be re-determined regularly during Aurora's 2012 drilling program on the basis of Aurora's future proved developed producing reserves.

The senior notes to be offered will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The senior notes are being offered only to qualified institutional buyers in the United States in accordance with Rule 144A under the U.S. Securities Act and to certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. In Canada, the notes will be offered and sold on a private placement basis in certain provinces of Canada to certain accredited investors.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.

Forward-Looking Statements

Statements in this press release which are not statements of historical facts, including but not limited to those relating to the proposed offering of senior notes and the proposed use of proceeds from the offering, are forward-looking statements. These statements instead represent management's current expectations, estimates and projections regarding future events. Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on such statements.

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