Sirius Petroleum PLC Ororo Field - $20m Debt Funding (2014O)

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RNS Number : 2014O

Sirius Petroleum PLC

28 January 2019

Sirius Petroleum Plc

("Sirius" or "the Company")

Ororo Field Funding Update

US$20 million debt facility agreed with Barak Fund SPC Limited

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."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

 
 
   Enquiries: 
 Sirius Petroleum plc                      T: 020 3740 7460 
  Bobo Kuti, CEO 
  Mark Henderson, CFO 
 Cantor Fitzgerald Europe Limited (Nomad   T: 020 7894 7000 
  and Broker) 
  David Porter/Nick Tulloch 
 Gable Communications Limited              T: 020 7193 7463 
  John Bick                                 srsp@gablecommunications.com

The Ororo Field

The Company's strategy is to target proven opportunities and maximize hydrocarbon production and recovery through the acquisition of discovered assets in Nigeria, with a particular focus on shallow offshore areas and the realisation of upside potential through appraisal activities.

Sirius's initial focus is the Ororo field, which was originally operated by Chevron in 1986. Chevron drilled Ororo-1 and hydrocarbons were discovered in seven sandstone reservoirs (D1 to D5, F and G). Four of the reservoirs in the original Ororo-1 well were tested, two produced oil (D3 and G) at a combined rate of 2,800 bopd and two produced gas condensate (D4 and D5).

The Ororo field is located within OML 95 in the Niger Delta, offshore Nigeria, in the western part of the prolific Niger Delta petroleum system. It lies in shallow waters offshore Ondo State in water depths ranging between 23ft and 27ft. The field is adjacent to the Mina, West Isan, Ewan, Eko and Parabe fields, all of which are operated by Chevron.

Sirius has a 40% economic interest under a Financial & Technical Service Agreement and entered into a Joint Operating Agreement in August 2017 with its indigenous partners Owena Oil & Gas (100% Owena State owned entity) and Guarantee Petroleum, who own 27% and 33% respectively. According to the Ororo CPR, the mid-case gross recoverable 2C contingent resources are 24mmboe as defined by the Society of Petroleum Engineers - Petroleum Resources Management System.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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