Meridian Buys East Lake Verret Field, Secures Debt Facility

Meridian Petroleum announced that its subsidiary, Meridian Resources USA Inc, has entered into a purchase and sale agreement to acquire interests in the East Lake Verret (ELV) Field in South Louisiana, USA from Rozel Energy II L.L.C. The Acquisition is conditional upon the Company obtaining financing for the deal, and a conditional Commitment Letter with Macquarie Bank Limited (MBL) for a $50 million debt facility has been signed to finance the Acquisition and for further developments and acquisitions.

Highlights of the Acquisition:

Meridian to acquire 60% of Rozel's working and net revenue interest in, and the operatorship of:

  • 6 producing oil and gas wells
  • 2 behind pipe zones
  • 5 undeveloped drilling locations, all in the ELV Field
  • Cash consideration of $9.84 million
  • Proven reserves acquired of 768,000 boe at a cost of $12.80/boe
  • Proven and Probable reserves acquired of 1,020,000 boe
  • Reserves split approximately 55/45 natural gas/oil
  • Current production levels from 6 producing wells (net to Meridian) of:

  • 1 mmcf/day of gas
  • 60 bbls/day of crude oil
  • Completion planned for 30 June 2008
  • Highlights of the Debt Facility:

  • MBL has entered into a conditional Commitment Letter to provide a 3 year $50 million Senior First Lien Secured Credit Facility to the Company and its subsidiaries.
  • The Facility is to be made available in 3 tranches;

  • Tranche A $9 million to fund the acquisition of the Rozel interests
  • Tranche B $6 million, available at MBL discretion for further development and working capital
  • Tranche C $35 million, available at MBL discretion for further major developments and acquisitions
  • The Board of the Company has agreed to allot warrants to purchase 9 million shares in Meridian Petroleum plc to MBL and these will be issued upon completion of the acquisition.
  • "The acquisition of the interests in the ELV field fits directly into the Company's clearly stated strategy of acquiring US assets which are in production or can be brought into production relatively quickly," said Chairman Stephen Gutteridge. "The production profile of ELV diversifies the Company's cash-flow away from dependence on the Orion well; adds high value crude oil production and increased gas production; and extends the group's positive operating cash-flow position into the future. Our partnership with Macquarie and the availability of the Debt facility will allow the group to continue to aggressively develop and add further US assets, move forward with larger projects such as the Australian licenses, and create the potential for corporate acquisitions."


    Our Privacy Pledge

    Most Popular Articles

    From the Career Center
    Jobs that may interest you
    Technical Coordinator
    Expertise: Client Representative|Process Management|Technical Writing
    Location: Houston, TX
    Executive Assistant
    Expertise: Executive|Secretarial or Administrative
    Location: United States
    Regional Manager - Saybolt
    Expertise: Executive|Operations Management
    Location: Linden, NJ
    search for more jobs

    Brent Crude Oil : $51.38/BBL 2.44%
    Light Crude Oil : $50.43/BBL 2.26%
    Natural Gas : $3.14/MMBtu 0.94%
    Updated in last 24 hours