Financing Update

RNS Number : 6636V

Petroneft Resources PLC

15 December 2021

 

15^th December 2021

PetroNeft Resources plc ('PetroNeft' or 'the Company')

Financing Update

PetroNeft (AIM: PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 90% owner and operator of Licence 67 and 50% owner and operator of Licence 61 provides the following financing update.

Highlights

· Reduction in Petrogrand loan to $2.3 million and all conditions now satisfied to extend maturity for an additional year.

· Agreement reached to extend the current term by 30 days to 15^th January 2022 due to on-going 3^rd party refinancing negotiations.

Petrogrand Loan facility  

In January 2018 PetroNeft agreed a loan facility for up to US$2 million with Swedish company Petrogrand AB ("Petrogrand") secured on the assets of PetroNeft. The loan facility was fully drawn down and was used to finance the drilling of the successful C-4 well in 2018 and for general corporate purposes. During 2019, the parties further agreed to an increase in the facility by US$500,000 to US$2.5 million and a revised maturity date of 15th December 2020. Terms included the potential entitlement to bonus payments of US$2.5 million per Licence if either or both Licence 61 or Licence 67 are sold before 31 December 2022. On the 15^th December 2020, the maturity date was further extended to 15^th December 2021 under the following terms:

· Extension to the Maturity date to 15^th December 2021 at the same interest rate.

· Ten percent of the loan amount to be repaid in six equal instalments from July through to December 2021.

· Interest accrued and owing at that time was rolled up into the outstanding principal amount.

· Further extension possible to 15^th December 2022 on payment of a further 10% of outstanding loan amount by 15^th December 2021.

· Extension to the bonus payments timing by up to two years to 31^st December 2024.

PetroNeft has met all interest payments in full and in addition has now paid the revised contracted amount of $574,430 (representing 20% of the principal), reducing the principal to $2.3 million, which enables the facility to be extended by a further 12 months to 15^th December 2022. 

PetroNeft is however negotiating the potential whole or partial refinancing of this facility with a third party.  In the event that the refinancing occurs before 15 January 2022, Petrogrands entitlement to bonus payments would remain only until 31^st January 2024.  If Petroneft is successful in renegotiating the loan facility, it could significantly improve its debt position. If agreement is not reached then the maturity date will revert to 15^th December 2022 with other loan terms remaining.

David Sturt, CEO of PetroNeft Resources plc, commented:

"Since the loan facility was first put in place back in 2018 Petrogrand have been very supportive of the company, providing the financial support on which much of our progress has been based.   We are very pleased that Petrogrand has provided us with an extension to enable the company to try and progress alternative refinancing options. Whilst these discussions are advanced and ongoing, there is no certainty that they will be successful.  Should they not prove successful we are happy to have the continued support in place from Petrogrand for another year, if required.

We are grateful and reassured by the continued confidence and support shown by Petrogrand in our performance and future plans for our assets."

 For further information, contact:

David Sturt, CEO, PetroNeft Resources plc	[phone]
John Frain/Ciara O'Mongain, Davy (NOMAD and Broker)	[phone]
Joe Heron/Douglas Keatinge, Murray Consultants	[phone]

 

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