Meridian Petroleum has completed its acquisition of 60% of Rozel Energy’s interests in the East Lake Verret Field in South Louisiana, U.S.
The agreed cash consideration for the Acquired Interests was $9.84 million based on an effective date of March 1, 2008. This consideration was adjusted to reflect the operating cash flows generated by the ELV Field in March and April 2008, and the adjusted consideration paid was $8.95 million. Transaction costs of the Acquisition are estimated at $600,000.
The Company will assume the operatorship of the ELV Field with effect from July 1, 2008. The ELV Field is currently producing at a gross daily rate of 5 mmcf of gas and 250 bbls of oil. The Company’s net current production is 1 mmcfd of gas and 60 bbls/day of oil.
The Company also has concluded a Debt Facility Agreement with Macquarie Bank Limited, which provides the Company with up to $50 million of funding for acquisitions and asset development. The first tranche of $9 million has been drawn down to fund the Acquisition and associated transaction costs and in accordance with the agreement, warrants over 9 million ordinary shares in the Company have been granted to MBL at an exercise price of 9.29 pence per Meridian share.
The second $6 million tranche of the facility, available subject to MBL approval, will provide the Company with funding to develop the proven undeveloped hydrocarbon reserves in the ELV Field, and to pursue other attractive drilling opportunities currently being assessed by the Company. Over the next few months the Company expects to firm up plans for a drilling program of up to 3 wells on the ELV Field. The remaining $35 million of the facility is currently uncommitted.
“We are delighted to have completed the acquisition of the Rozel interests in the ELV field, and we are looking forward as operator to further developing the potential in the field. With the financial support of the $50 million facility provided by MBL, we have an opportunity to drive rapid growth in our production and reserves. We are now a company in a strong position with diversified gas and oil production, good cash-flow, short-term opportunities in the US and a plan to fully evaluate the substantial potential in our Australian licenses,” said Chairman Stephen Gutteridge.
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