PetroNeft Resources plc (LON:PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67, has provided the following financing update.
Petrogrand Loan facility
In January 2018 PetroNeft agreed a loan facility for up to US$2 million with Swedish company Petrogrand AB (“Petrogrand”) secured on the assets of PetroNeft. The loan facility was fully drawn down and was used to finance the drilling of the successful C-4 well in 2018 and for general corporate purposes. During 2019, the parties further agreed to an increase in the facility by US$500,000 to US$2.5 million and a revised maturity date of 15 December 2020. Terms include the potential entitlement to bonus payments of US$2.5 million per Licence if either or both Licence 61 or Licence 67 are sold before 31 December 2022.
The company is now pleased to announce that it has reached agreement with Petrogrand to further extend the loan under the following terms:
· Extension to the Maturity date to 15th December 2021 at the same interest rate.
· Ten percent of the loan amount to be repaid in six equal instalments from July through to December 2021.
· Further extension possible to 15th December 2022 on payment of a further 10% of outstanding loan amount by 15th December 2021
· Extension to the bonus payments timing by up to two years to 31st December 2024.
As previously disclosed, due to Petrogrand being an associate (as defined in the AIM Rules and Euronext Growth Market Rules) of Mr Maxim Korobov, the loan facility is considered to be a related party transaction under the AIM Rules and Euronext Growth Market Rules. The directors of the Company, having consulted the Company’s nominated advisor and Euronext Growth Market adviser, consider the terms of the loan facility to be fair and reasonable insofar as the Company’s shareholders are concerned.
David Golder, Chairman of PetroNeft Resources plc, commented:
“We are very pleased to have secured an extension in this facility after such a challenging year. This further enables the company to continue to focus on improving performance of its assets, particularly at a time when Licence 67 is transforming from an exploration to a production asset which will deliver cash flow to the business. We are grateful for and reassured by the confidence and support shown by Petrogrand in our performance and future plans for our assets.”
