Dragon Oil Repays EBRD Loan Early
Dragon Oil has repaid, early and in full, the outstanding loan, interest and expenses to the European Bank for Reconstruction and Development ('EBRD').
The loan facility of upto $60 million, was signed on November 1, 2000 and required full repayment by February 5, 2008. During the course of the loan facility, Dragon availed of a total of $38.3 million and has repaid, early and in full, the outstanding principal amount of US$27.6 million interest of US$1.023 million and minor expenses of US$13,721.
The loan facility, availability and drawdown was determined by semi-annual reviews which took into account Dragon's drilling program, actual production and capital expenditure.
Dragon's increased cash balances have enabled the Dragon Board to conclude that it is in the best interests of Dragon to repay the EBRD loan and thereby free up the Dragon Group's assets.
The loan was secured in favor of EBRD by the pledge of shares in the following subsidiaries of Dragon Oil Plc, namely Dragon (Holdings) Limited, Tampimex Oil Trading Limited, D&M Drilling Limited and Dragon Oil (Turkmenistan) Limited. These subsidiaries own substantially all of the assets of the Dragon Oil Plc Group.
The Chairman, Hussain M. Sultan, commented:
'We have enjoyed a good banking relationship with the EBRD over the past 6 years, and wish to thank them for their support in our Turkmenistan project and the field development plan. Now that Dragon has achieved a healthy cash position, the time is opportune for us to repay, not just early, but the entirety of the EBRD loan and therefore release from security the Company's assets. This is a positive step forward in our plans to develop the Cheleken Contract Area and grow our production.'
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