Equator Exploration Inks Deal for $65 Million Loan
Equator Exploration has signed a two year loan agreement with certain of its shareholders for US$65 million.
The Loan, which is secured on Equator's shares in its wholly owned subsidiary, Equator Exploration (OML 122) Limited (Equators OML122/Bilabri project company), is repayable in full within 24 months of first drawing, carries an interest rate, payable semi-annually, commencing at 10 percent per annum and increasing to 11 percent on 1st January 2007 and 12 percent 1st July 2007, to a maximum of 14 percent on any balance outstanding at 1st January 2008. In addition the lenders will have the option to receive warrants to subscribe for new ordinary shares in the Company at £2.00 per share, exercisable at any time from commencement for a period of 38 months. Alternatively, the Lenders can elect to receive share appreciation rights whereby the lenders will receive a cash settlement from the Company for the difference between the £2.00 warrant subscription price and the market price at the warrant expiry date. The lenders who elect to participate in the share appreciation rights will have the option to convert to warrants on a pro rata basis once the Company commences production. A total of approximately 17.4 million warrants, the exact number being dependent upon the exchange rate ruling at the date of closing of the loan, are available if fully exercised.
The Loan provides the Company with additional cash resources for funding the ongoing development of the Bilabri oil field offshore Nigeria within Block OML122.
Commenting on the Loan, Wade Cherwayko, Chief Executive Officer of Equator, stated:
"We are very pleased to have concluded this Loan, which provides Equator with interim funding for the ongoing development of the Bilabri field on OML 122, offshore Nigeria. Having now secured the FPSO, we are confident of realizing production in the third quarter of 2007."
- Equator Updates on Status of Offshore Nigeria Prospecting Licenses (Jan 26)
- Equator Exploration Secures Short-Term Funding (Dec 24)
- Equator & Peak Dance Around Bilabri (Jun 25)