TIDMPELE
RNS Number : 7437T
Petrolatina Energy PLC
12 December 2011
EMBARGOED FOR RELEASE NOT BEFORE 07.00
12 December 2011
PetroLatina Energy Plc
("PetroLatina" or the "Company")
New Senior Secured Debt Facility of up to US$100 million
to replace existing facility
PetroLatina (AIM: PELE), the independent oil and gas
exploration, development and production company focused on Latin
America, announces that it has entered into a senior secured credit
agreement with BNP Paribas ("BNP") to repay and replace its
existing facility with Macquarie Bank Limited ("MBL").
In accordance with the terms of the credit agreement, executed
yesterday, BNP has arranged a revolving senior secured loan
facility of up to US$100 million to the Company in order to repay
the existing MBL facility and assist with financing the accelerated
development and enhancement of the Company's highly promising oil
and gas assets in Colombia.
The initial borrowing base has been set at US$36 million, which
was made available and drawndown on completion of the credit
facility documentation on Friday 9 December 2011. Of this US$36
million, approximately US$29.425 million has been utilised to repay
the Company's existing senior secured facility and close out all of
the related oil price hedging contracts with MBL.
Highlights:
-- BNP has entered into an agreement to provide a four year
revolving Senior First Lien Secured Credit Facility of up to US$100
million (the "Senior Facility") to the Company and its
subsidiaries, in order, inter alia, to repay the existing facility
with MBL and finance part of the Company's planned ongoing drilling
programme.
-- The Senior Facility provides:
o Up to US$100 million of funding, with availability for
drawdown determined relative to a borrowing base calculated by
reference to the Company's proved reserves. The Senior Facility is
designed such that the borrowing base should increase over time in
line with the Company's future potential increase in reported
reserves, subject to and in accordance with the terms of the credit
agreement; and
o The initial borrowing base has been set at US$36 million which
was made available by BNP on closing on Friday 9 December 2011 to,
inter alia, part-fund the Company's current exploration and
development operations in Colombia and to fully repay the existing
senior secured facility and close out oil price hedging contracts
with MBL.
o The Senior Facility has a lower borrowing cost of 3 month US
dollar LIBOR plus 4.5% per annum, as opposed to a minimum of 3
month US dollar LIBOR plus 7.5% under the existing MBL
facility.
BNP acted as Sole Lead Arranger and Sole Bookrunner, in
connection with the Senior Facility, and served as the
Administration Agent ("Administration Agent") and Global
Coordinator under the Senior Facility.
Luc Gerard, Executive Chairman of PetroLatina, commented:
"This new Senior Facility, comprising a reserve based lending
loan, provides us with increased and more cost effective financial
and operational flexibility to enable PetroLatina to take advantage
of the current rapid growth in the Latin American energy market at
a time of considerable global macroeconoic uncertainty and
volatility. The Company endeavours to maintain an appropriate mix
of debt and equity to finance its growth aspirations and the Senior
Facility with BNP is consistent with, and an important part of,
this strategy, serving to enhance our liquidity as we continue to
execute our long-term exploration and development programme for our
extensive asset base in Colombia.
We continue to believe that Latin America, and in particular
Colombia, offers attractive consolidation, corporate and new
license acquisition opportunities."
Juan Carlos Rodriguez, Chief Executive Officer of PetroLatina,
commented:
"Our corporate plan continues to be to convert our Probable and
Possible Reserves into Proved Reserves and considerably increase
production and cash flow through the ongoing drill programme. Ryder
Scott's reserves assessment announced in late April 2011 also
reviewed the Company's exploration prospects and concluded that our
estimate that these could contain approximately 22.8 million
barrels of gross recoverable oil (8.72 million barrels net to the
Company) on an unrisked basis was reasonable. These Prospective
Resources principally relate to resources potentially recoverable
from: (a) additional development drilling in the Santa Lucia field
where considerable resources appear to exist in the Lisama
formation; (b) the Juglar, Colon deep and shallow prospects located
on the La Paloma block; and (c) the Putumayo-4 block.
This new facility, together with the full proceeds (US$15
million) now received from our farm-out of the VMM-28 exploration
block to Shell Exploration and Production Colombia GmbH, as
previously announced on 4 November 2011 and 15 July 2011, provides
us with an enhanced ability to vigorously pursue our planned
ongoing and future exploration and development programmes."
Key terms of the Senior Facility
The principal terms of the Senior Facility are as follows:
-- The Senior Facility is a committed facility of up to US$100
million governed by an initial borrowing base amount of US$36
million. The initial drawdown of US$36 million provides the Company
with additional capital to deploy on its ongoing exploration and
development work programme as well as enabling the Company to fully
repay MBL its pre-existing senior secured facility and the closing
out of the related oil price hedging contracts;
-- The Company's total borrowing capacity or base under the
Senior Facility will be subject to periodic review and adjustment,
principally to fund additional exploration and development
activities, with the total funds available for drawdown at any
given time subject to a number of factors, including BNP's approval
of the Company's reported reserves levels;
-- The Senior Facility may be partially or fully prepaid at the
end of any LIBOR period on three business days' prior notice
without penalty to the Company (save for any break funding
costs);
-- The Senior Facility has a four-year term to 9 December 2015
(the "Final Maturity Date"), with repayment on a quarterly linear
amortisation basis of the then outstanding principal balance
commencing twenty-four months prior to the Final Maturity Date;
-- The Senior Facility is secured over all of the Company's
exploration and production assets in Colombia (save for the Rio
Zulia-Ayacucho pipeline and its revenues which are pledged to an
existing third party debt provider);
-- Interest is payable on amounts drawndown by the Company at a
rate of 1, 2 or 3 month US dollar LIBOR plus 4.5% on the last day
of the interest period elected by the Company for such loan. The
current 3 month US dollar LIBOR rate is approximately 0.54%;
-- The documentation governing the Senior Facility contains
usual and customary affirmative financial, operational and
corporate covenants for a credit facility of this nature, including
but not limited to, the Company's continuation of business and
existence; compliance with relevant laws; maintenance of
appropriate insurance; delivery of financial statements, reports,
accountants' letters, projections, officers' certificates and other
information requested by the Administration Agent or the lenders;
maintenance of financial ratios within certain defined ranges; use
of proceeds; and compliance with environmental laws and preparation
of environmental reports. Further provisions cover notices of
defaults; litigation, maintenance of books and records and the
right of the Administration Agent or lenders to inspect the
Company's property and records;
-- The documentation governing the Senior Facility also contains
usual and customary representations and warranties for facilities
of this type, negative covenants and appropriate additional
covenants in the context of the proposed use of funds, including
but not limited to: indebtedness; liens; investments; mergers;
consolidations; material sales of assets and acquisitions; change
of control; dividends; distributions and other restricted payments;
and
-- PetroLatina has agreed to pay the Administration Agent, for
the benefit of the lenders, an arrangement fee of 1.75% on the
amount drawndown at closing, and a commitment fee of 2% on the
unused portion of the commitments (of which there are none). The
Company has agreed to pay the Global Coordinator, a co-ordination
fee of 0.5%, of the aggregate amount committed for drawdown under
the Senior Facility from time to time.
Enquiries:
PetroLatina Energy Plc
Juan Carlos Rodriguez, Chief Executive Tel: +57 1627
Officer 8435
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Pawan Sharma, Executive Vice President - Corporate Affairs & CFO Tel: +44 (0)20 7766 0081
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Strand Hanson Limited
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Simon Raggett / Matthew Chandler Tel: +44 (0)20 7409 3494
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FTI Consulting
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Ben Brewerton / Chris Welsh Tel: +44 (0)20 7831 3113
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This information is provided by RNS
The company news service from the London Stock Exchange
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