15 May, 2018 – Sirius Petroleum (AIM: SRSP), the Nigeria focused oil and gas exploration and development company, announces audited Final results for the twelve-month period ended 31 December 2017.
· Sirius entered into a Joint Operation Agreement (‘JOA’) on the Ororo Field enabling the Company to transition from an investing company into an operating company
o New equity issued by the Company totaling 723,700,000 new Ordinary Shares raising gross proceeds of approximately US$9.5 million at a price of 1 pence per share – finally ratified by shareholders in December 2017.
o In addition, a Convertible Loan Facility of US$12 million was entered into carrying a coupon of LIBOR plus 6.5 per cent. and partially convertible at a 50 per cent premium to the Issue Price of the Placing.
o The combined proceeds of the new capital and the commitments of the Company’s commercial partners under previously announced Commercial Agreements provide the combined resources to the Company to drill the Ororo-2 well and bring it into production in accordance with the Ororo JOA.
· In Q4 the Company commenced discussions and due diligence with REYL & Co (UK) LLP, part of the Swiss banking group REYL et Cie, which has CHF 13bn AUM, to structure a contingent liquidity facility of up to US$100 million which would be backed by the securitisation of receipts under the BP Prepayment and Offtake Agreement.
· Sirius confirmed that as part of its strategy and on confirmation that the Ororo-2 well production rates of the hydrocarbon reservoirs are in line with those estimated in the Competent Persons Report (“CPR”) on the asset, and conditional on the Company securing further financing, by way of the non-dilutive REYL facility, the Company will undertake a multi well campaign to fully develop the Ororo Field, involving the drilling of up to four further wells and the installation of permanent production, processing and pipeline facilities at the Field.
· Sirius entered into a Prepayment and Offtake Agreement with BP in July 2017:
o BP will provide a prepayment facility for a fixed volume of Escravos Blend crude deliveries by prepaying an amount of up to US$10 million per cargo to Sirius.
o The availability of the prepayment facility is conditional upon, among other things, the Ororo Field achieving certain daily production levels.
The Annual General Meeting will be held at 10.00 am on Thursday, 14 June 2018 at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG. A Notice convening the meeting along with the 2017 Annual Report will be sent to shareholders shortly and will also be available for download from the Company’s website: www.siriuspetroleum.com
Bobo Kuti, CEO of Sirius, said: “The end of 2017 marked a milestone for the Company including the financial resources to commence the development phase of the Ororo Field, the Company’s first offshore marginal field oil and gas asset and as a consequence, since the 2017 year end, the Group has undergone both a financial and operational transformation.
“The prevailing oil price has also resulted in a substantial uplift in the underlying value of the Ororo Field and according to the Ororo CPR produced by Rockflow and set out in the Company’s Admission Document, it is estimated that the Ororo-2 well will initially produce approximately 2,700bopd of light oil and 6mmcfd of gas. Rockflow estimates that the Ororo asset has a Mid Case Net Present Value to Sirius (NPV10) of $96.1m, based on a $65 per barrel flat real oil price for the life of the field.
“During 2018 the Group commenced a range of work streams with its operational partners: Add Energy, Schlumberger and COSL which included additional technical work such as the developing the Mechanical Earth Model with the team at Schlumberger in order to optimize the drilling program on Ororo-2 and Ororo-3. The rig identification has been made in preparation for final mobilization and continued equipment requisitions such as the Compact Well Head Systems for Ororo-2 and Ororo-3 and more recently for Ororo-4 and Ororo-5.”
Full announcement at www.siriuspetroleum.com