Oilexco Receives Demand Letters for Payment of North Sea Credit Facilities
Oilexco Incorporated has received demand letters from The Royal Bank of Scotland plc, on behalf of itself and other lenders, for immediate payment of all amounts outstanding under the US $547.5 million senior and super senior credit facility and Pounds Sterling 100 million pre-development credit facility of Oilexco North Sea Limited ("ONSL") with those banks. The demands are pursuant to guarantees that were given by Oilexco of ONSL's obligations under the credit facilities when those facilities were entered into.
As previously announced on January 7, 2009, an order of an English court appointed representatives of Ernst & Young LLP as joint administrators to manage the affairs, business and property of ONSL. The joint administrators have continued a previously initiated process for the sale of shares or assets of ONSL. Oilexco, through a wholly owned subsidiary, has submitted a non-binding expression of interest to acquire certain assets of ONSL by assumption of future obligations related to those assets. Oilexco has been advised that other non-binding expressions of interest have also been received by the joint administrators of ONSL. It is expected that the sale of the assets or shares of ONSL will be concluded prior to the end of the first quarter of 2009, however Oilexco has no way of predicting who the ultimate purchaser or purchasers will be, nor the value to be realized through the sale process.
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