Pertra has seven operator ships on the Norwegian Continental Shelf. The company has identified several drilling prospects over the coming years, thus embarking on an extensive exploration program. Estimated exploration expenses amount to a total of approximately 1,500 MNOK for the 2007-2009 period. The exploration program for this three- year period might end up with around 100 million BOE. The company does not anticipate production revenues to bring down the refund amount over the coming two to three years. On this background, Pertra has negotiated and signed a Term Sheet for a drawing facility with DnB NOR, enabling Pertra to borrow on basis of the state tax refund amount from the time the exploration costs accrue and up to the points in time when the company receives the tax refund from the state.
In 2005 the Norwegian State implemented new incentives aimed at increasing the level of exploration activities on the Norwegian Continental Shelf. The tax value of exploration costs is to be refunded in cash, though limited to the annual income tax loss in the company. The cash refund is paid to oil companies, normally in December, subsequent to the Oil Taxation Office's tax assessment for the preceding year. With security in such tax refunds, banks are now in a position to efficiently fund exploration activities.
The duration of the loan facility is to and including 2010, and enables Pertra to underpin a major portion of the company's exploration program at low costs. The facility is conditioned upon a final Loan Agreement between DnB NOR and Pertra.
"The loan facility constitutes an important element in the implementation of Pertra's ambitious exploration strategy. Moreover, the borrowing cost for this facility is more competitive than costs for traditional bank financing and bonds," says CFO in Pertra, Paul E. Hjelm-Hansen.
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