Debt |
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure Text Block |
Note 17 Debt The Company's long-term debt consists of the following:
The following is a summary of principal maturities of long-term debt:
The variable rate of the note is based upon the Wall Street Journal Prime Rate (the index) plus 3%, subject to a floor rate of 6.25%. The index was 3.25% at September 30, 2011, resulting in an interest rate of 6.25% per annum as of September 30, 2011. Under the note payable, NP is subject to both financial and non-financial covenants. The financial covenant is to maintain a debt service coverage ratio, as defined, of 1.2 to 1.0, which is calculated based on NP's annual tax return. As of September 30, 2011, based upon the FY2010 tax return, NP was in compliance with the financial covenant.
The Company also has a $1,000,000 working capital line of credit with the same bank, classified as short term debt. The total amount due on the line at September 30, 2011 was $700,000. The line bears interest at a variable rate which was 6.50% as of September 30, 2011. A portion of this line of credit, $25,000, secures a letter of credit that is in favor of the Bureau of Land Management and another $25,000 of this revolving line of credit secures a business credit card used by NP. As of September 30, 2011, $250,000 is available under this line of credit. The note payable to bank, letter of credit and the short term line of credit are collateralized by first mortgages and assignment of production for the Poplar Field and are guaranteed by MPC up to $6,000,000, not to exceed the amount of the principal owed. The carrying amount of the Company's long term debt approximates its fair value, because of the variable rate, which resets based on the market rates. |