Cirrus Secures Financing for M7-A, L8-D Projects Offshore Netherlands
Cirrus its wholly owned subsidiary Cirrus Energy Nederland B.V. have signed an Amendment and Restatement Agreement relating to the Secured Revolving Borrowing Base Facility Agreement with The Royal Bank of Scotland plc ("RBS").
The original (euro)30 million Secured Revolving Borrowing Base Facility Agreement was put in place to support the funding of both the M1-A and M7-A development projects. In light of the success of the drilling program in the L8-D field and the delays in the M1-A development project, the Amended Facility has been established to finance the completion of the M7-A development project and to finance the modification work on the L11b-A platform that is required to tie-in the recently drilled L11b-A06 development well. Both the M7-A and L8-D fields are expected to commence production in the fourth quarter of 2009.
The Original Facility was comprised of two tranches; a (euro)25 million senior tranche to support the funding of the original development projects as well as a (euro)5 million junior tranche which was available in the event of unbudgeted field development costs. The initial availability under the Amended Facility is expected to fully cover Cirrus' net share of the remaining costs to complete the M7-A development and the required modifications and well tie-in at the L11b-A platform which are estimated to be approximately (euro)16 million.
The first draw on the Amended Facility is expected imminently for M7-A and later for L8-D following satisfaction of certain conditions related to L8-D. The facility reduction schedule has not changed from the Original Facility culminating in a maturity date of June 30, 2012.
Cirrus President and CEO David Taylor commented, "We are very pleased that we have concluded this revised agreement with RBS and are able to use the debt facility to fund our remaining development costs to bring both the M7-A and L8-D fields into production. Coupled with our strong balance sheet and cash position, this additional working capital allows Cirrus to continue with the accelerated exploration and development of its assets in the Netherlands."