Erin Energy Announces Debt Financing
February 09 2017 - 6:32AM
Business Wire
Erin Energy Corporation (Erin Energy or the Company) (NYSE
MKT:ERN) (JSE:ERN) announced today that it, together with its
subsidiary Erin Petroleum Nigeria Limited (EPNL), has entered into
a three-year secured Pre-Export Finance Facility Agreement
(Facility) with The Mauritius Commercial Bank Limited (the Lender).
The Facility provides for a total commitment of USD $100 million
and bears an interest rate of three-month LIBOR plus a 6% margin.
The Facility will be repaid under a sculpted amortization schedule
beginning on June 30, 2017 and ending on December 31, 2019.
Daniel Ogbonna, Senior Vice President and Chief Financial
Officer commented: “I am pleased to announce the signing of this
facility. This allows us to continue to invest in our offshore
Nigeria assets, which we believe will create attractive returns for
our shareholders.”
The Facility will be used to fund EPNL’s planned drilling of the
Oyo-9 well offshore Nigeria. In connection with the new Facility
EPNL, entered into an exclusive off-take agreement with Glencore
Energy UK Ltd. on January 18, 2017 for EPNL’s entire volumes of oil
arising from the Company’s Oil Mining Leases 120 and 121. The Oyo-9
well is expected to add an additional 6,000-7,000 barrels of oil
per day to current Oyo field production.
The Facility is supported by a guarantee from The Standard Bank
of South Africa Limited (the SBSA Guarantee). The SBSA Guarantee
must be entered into by the parties thereto as a condition
precedent to the initial drawdown on the Facility. The Facility is
subject to further conditions to closing, as is customary with such
facilities.
In connection with the Facility, the Company, EPNL, the Lender
and EPNL’s existing secured lender Zenith Bank PLC (Zenith) also
entered into an Override Deed (the Override Deed) that establishes,
inter alia, pro-rata rights of the Lender and Zenith in respect of
the proceeds from the Off-take Contract, sets out pro-rata sharing
of enforcement proceeds between the Lender and Zenith and grants
the necessary consents to EPNL to enter into the Facility and
related documents.
Canaccord Genuity Ltd. acted as financial advisor to Erin Energy
in regard to the Facility.
Additional details regarding the Facility, the Financing Support
Agreement and the Override Deed are available in the Company’s
Current Report on Form 8-K filed today with the Securities and
Exchange Commission.
Erin Energy Corporation is an independent oil and gas
exploration and production company focused on energy resources in
sub-Saharan Africa. Its asset portfolio consists of 9 licenses
across 4 countries covering an area of 40,000 square kilometres (10
million acres), including current production and other exploration
projects offshore Nigeria, as well as exploration licenses offshore
Ghana, Kenya and Gambia, and onshore Kenya. Erin Energy is
headquartered in Houston, Texas, and is listed on the New York and
Johannesburg Stock Exchanges under the ticker symbol ERN. More
information about Erin Energy can be found at
www.erinenergy.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical fact, concerning activities,
events or developments that the Company expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Although the Company believes the expectations
reflected in these forward-looking statements are reasonable, they
involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect.
The Company’s actual results could differ materially from those
anticipated or implied in these forward-looking statements due to a
variety of factors, including the Company’s ability to successfully
finance, drill, produce and/or develop the wells and prospects
identified in this release, and risks and other risk factors
discussed in the Company’s periodic reports filed with the
Securities and Exchange Commission. All forward-looking statements
are expressly qualified in their entirety by this cautionary
statement. You should not place undue reliance on forward-looking
statements, which speak only as of their respective dates. The
Company undertakes no duty to update these forward-looking
statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20170209005614/en/
Erin Energy CorporationInvestors and media:Lionel C. McBee,
+1-713-797-2960lionel.mcbee@erinenergy.com
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