Buccaneer Energy Ltd. has finalized a $50 million Credit Facility with Macquarie Bank Limited. The Facility will be made directly to the Company’s wholly owned subsidiary Buccaneer Resources, LLC.
Under the terms of the Facility, the Company will have an initial available draw down capacity of $12 million plus the ability to put in place a $2.3 million Letter of Credit to finance the bond requirements associated with the Pompano project. This Facility replaces and refinances the $5 million Promissory Note announced on June 3, 2008.
The Company is planning an aggressive drilling and development program over the next 6-9 months and this Facility, together with production cash flows, gives the Company the financial capacity to implement this program. The remaining $38 million will be incrementally available for draw down as additional wells are brought into production.
The Facility will be used in the short term to continue the development of the Pompano field, including a third well which is scheduled to commence in the next 30 days, development of its recently awarded and 100% owned Jaguar project and further acquisitions currently under consideration.
The Facility matures on June 30, 2012 and the interest rate payable is in line with commercial facilities in this nature.
The quantity of options to be issued by Macquarie for additional draw downs is calculated using a 30 day volume weighted average price plus a premium, therefore as the price increases the quantity of options to be issued will decrease.
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