Crusader Energy Group Inc.

Crusader Energy Group Inc., Oklahoma City, (Amex: KRU) has retained Jefferies & Co. Inc. to review strategic alternatives following a borrowing-base redetermination that resulted in a $5-million deficiency. Crusader focuses on the Anadarko Basin and Central Uplift, Fort Worth Basin Barnett shale, Delaware Basin, Val Verde Basin and the Bakken shale of the Williston Basin. As of year-end 2008, Crusader proved reserves were 206 billion cubic feet equivalent (73 billion proved developed producing; 17 billion proved developed nonproducing). Annual production for 2008 was approximately 10.7 billion cubic feet equivalent. It holds 1.015 million gross acres (442,000 net). The company cites the current credit market and lower oil and gas prices as influencing its decision to hire a financial advisor. Crusader president and chief executive David D. Le Norman says, "We were pleased with our performance with the drillbit this year and the quality reserves, land holdings and 3-D assets we were able to accumulate…However, the reduction in the borrowing base precipitated our moving very quickly to hire a quality financial advisor to aid us in identifying and evaluating alternatives that would maximize our stakeholders' value in this difficult time for the company and our industry." The availability on Crusaders' $140-million senior credit facility was reduced from $70 million to $25 million. The outstanding balance of $30 million exceeded the revised availability, resulting in a borrowing-base deficiency of $5 million. Crusader has further reduced its 2009 drilling budget to $43.6 million from the previously announced $103.6 million with two drilling rigs active on operated properties focusing only on the company's Cleveland tight-sand development and one rig on a nonoperated property in the Anadarko Basin. In June 2008, Crusader acquired Dallas-based Westside Energy Corp. in a reverse merger valued at approximately $956 million in stock.