Maple Energy has provided an update on its financing arrangements for 2009 and its exploration and drilling program for Block 31-E in Peru.
Medium-Term Credit Facility
On January 19, 2009, Maple entered into a US $10 million, five-year secured credit facility (the "Facility") with Banco de Credito del Peru ("BCP"), and Maple drew down the full available amount of US $10 million on January 23, 2009.
The Facility is denominated in Peruvian currency (Nuevos Soles) at a fixed rate of 11.75% for any amounts drawn under the Facility. Maple converted the Peruvian currency facility into a US dollar fixed interest rate credit facility by means of a cross currency swap contract with BCP (the "Swap") that closed concurrently with the Facility, thereby reducing the interest to a fixed rate of 8.56%.
The net proceeds from the Facility are expected to be used (i) to finance a portion of Maple's capital costs in developing its producing oilfields, (ii) to repay up to US $2.6 million of outstanding indebtedness and (iii) for general corporate purposes.
Block 31-E Exploration and Drilling Program
As previously announced, Maple recently acquired approximately 225 kilometers of seismic data to identify optimal drilling locations for its Cashiboya Deep prospect and provide additional geological information on its Santa Rosa prospect in Block 31-E (100% owned and operated by Maple).
Maple has made significant progress with the processing and interpretation of the seismic data relating to Block 31-E and expects to commence drilling operations on the Santa Rosa prospect in the first quarter of 2009.
The Company's initial interpretation of the seismic data has reconfirmed that the Santa Rosa structure has a 4-way dip closure. However, the initial interpretation also indicates that the Best Estimate prospective resource volume of 219.5 MMbbls of oil as stated in Netherland, Sewell and Associates, Inc. report dated December 31, 2007 could be smaller than originally estimated, and such decrease, if any, may be material. The Company intends to complete its analysis and processing of the seismic data and will provide a further update on the size and the probability of recoverable oil from its Santa Rosa prospect when such information can be confirmed.
Rex Canon, CEO of Maple Energy, commented today, "I am pleased with our ability to enter into this credit facility with one of Peru's reputable financial institutions despite challenging market conditions. While we continue to generate cash from our operations, this transaction provides us with additional flexibility at an important time in the Company's development. We believe these funds will further assist us with the development of our producing properties, while permitting us to pursue attractive opportunities that enhance the Company's overall value.
"We also remain optimistic about the potential for the Santa Rosa prospect as we continue to update our geological model incorporating all available seismic and geological information. While the information suggests that the structure may not be as large as we initially expected, we believe the Santa Rosa prospect remains a material and attractive exploration opportunity for the Company which we expect to start drilling in the first quarter of 2009."
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