Sirius Petroleum (AIM: SRSP), the Nigeria focused oil and gas development and production company, is pleased to announce a funding update for the Ororo Field as follows:
Binding agreement for up to US$20 million agreed with Barak Fund SPC Limited (“Barak”), a credit fund focused on Africa, to contribute to the funding of the first phase (Ororo-2 and Ororo-3 wells) of the Ororo field development.
Sirius has signed an agreement with Barak for the provision of a US$20 million debt facility, which, subject to the satisfaction of all conditions thereto, can be drawn down in specified tranches following first production. The facility will be deployed to pay for costs in relation to Ororo-2 (following first oil) as well as Ororo-3, which are due to service providers under the staged milestone payments for the Ororo work programme and marks an important step in developing the strategic, long-term partnership with Barak.
The facility has a term of 3 years from the date of the first drawdown and is repayable in four equal instalments of, if the facility is fully drawn, US$5 million (plus accrued interest thereon) in the last four quarters of the term of the loan. Commencing from drawdown, interest is charged at 3-month LIBOR plus 10% and is payable quarterly in arrears
Other key terms of the facility are that the facility may be cancelled and the outstanding amounts of the loans declared immediately due and payable by Barak upon, among other things, a change of control of Sirius or on the disposal of all or substantially all of the assets of Sirius’ group. Sirius has given customary negative pledges, warranties, undertakings, events of default and indemnities to Barak. Sirius will grant Barak an all assets debenture and a security assignment of receivables by way of assignment of offtake contracts. Drawdown is conditional upon, among other things, the satisfaction of customary conditions precedent.
Bobo Kuti, CEO of Sirius, said:
“We are delighted to have signed a facility agreement for up to US$20 million of debt funding from Barak to support the development of the Ororo field and look forward to building a strong strategic partnership with such a high-quality investment management team.”
Jean Craven, CEO & Co-Founder of Barak Fund Management, said:
“The Sirius shallow offshore strategy is complementary to our investment philosophy where we back strong asset-based investments and the development of the associated infrastructure of the asset. Sirius has a clear focus on maximising the potential of its assets, present and future, for the benefit of all of its stakeholders and has clearly assembled a ‘best in class’ team of partners to deliver increased value from the first of its operational fields.”