Canoro Secures Funding for Amguri Development
Canoro Resources has entered into an agreement with Gemini Oil & Gas Fund II, L.P., a private fund based in Jersey, Channel Islands, whereby the Fund will provide limited-recourse funding of US$10 million for appraisal and development drilling in Canoro's Amguri Field in Assam, India.
The funding will allow Canoro to drill additional appraisal and development wells in the field, beyond Amguri 10B and Amguri 11 without accessing the equity markets. The Fund will not earn a participating interest in the field, nor will it be responsible for future capital costs. The Fund will only be entitled to receive repayments based on Canoro's 60% share of gross revenue from the Amguri Field ranging from 7% before recovery of the original US$10 million, declining to 3.5% thereafter.
The agreement also provides that Canoro shall have the option between September 2010 and December 31, 2012 to buy back the Fund's entitlement, after recovery of initial investment with a pre-determined payment of US$12.75 million. If such option is exercised by Canoro, the Fund will be granted, subject to TSX Venture approval, warrants to subscribe for five million common shares of the Company, exercisable within six months from the date of issue at a subscription price of CAD$2.00 per share.
"This transaction benefits existing shareholders by providing additional funds for the early stage development of Amguri without accessing either the debt or equity markets at this time," commented Les Kondratoff, Canoro's President and CEO.
Canoro is a Canadian-based international oil and gas company operating in the Assam/Arakan basin of northeast India. Canoro is the operator of Amguri field with a 60% working interest. Canoro is the operator with a 65% working interest in the AA-ON/7 exploration block. Canoro also has a 15% non-operated working interest in the AA-ONN 2003/2 exploration block.
- Canoro Updates on Drilling at Northeast India Exploration Block (Jan 16)
- Canoro Tests Amguri Appraisal Wells (Dec 23)
- Brownstone, Partners Plan Drilling on NW Indian Block in Q1 2009 (Jul 16)
Company: Gemini Energy more info
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