Vintage Energy Ltd (ASX: VEN) signs list of binding terms for credit facility


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Vintage Signs Binding Term Sheet for ease of borrowing

Melbourne, December 6, 2021 AEST (ABN Newswire) – Vintage Energy Ltd (ASX: FRI) is pleased to announce the signing of a binding term sheet for a $ 10 million credit facility (“Facility”) with the PURE Resources Fund, managed by PURE Asset Management (“PURE”). The funds will complement the recently concluded agreement with AGL Wholesale Gas Limited (“AGL”) for gas sales.

The $ 10 million will be part of financing the initial capital requirements of the Vali field over the next two years. Vintage now has a gas purchase agreement with AGL with a prepaid component of $ 15 million and a binding terms sheet in place with PURE which, subject to the satisfaction of certain conditions precedent, will together provide access to a funding of up to $ 17.5 million (net at Vintage and excluding costs) to cover its equity share of capital costs to bring the Vali field to first production and through the cash flow phase initial project.

Vintage CEO Neil Gibbins said: “This financing is an excellent result for Vintage and its shareholders and constitutes further third party validation that the Vali gas field will be commercialized.

“With the strengthening of gas prices in national and international markets, the timing could not be better to market the important Vali Field for Vintage and its shareholders. ”

Daniel Porter, Portfolio Manager for the PURE Resources Fund, said: “We are delighted to support the team at Vintage as they seek to bring the Vali Field into production over the coming year.

“With nearby expansion opportunities at Odin, a pipeline of other promising production projects, and as East Coast gas faces significant structural supply constraints, we believe Vintage is on a path to growth. fantastic growth. ”

On November 1, 2021, Vintage announced the tripling of Champ Vali’s 2P Reserves (ATP 2021) compared to the initial estimate. Gross 2P reserves of 92.0 Bcf (101.0 PJ – 50.5 PJ of net toll) have been independently assessed and recognized (previously 2P gross of 30.3 Bcf (33.5 PJ – 16.8 PJ net rights)).

The key terms of the Facility are:

– $ 10 million to be drawn in two installments of $ 5 million

– The duration is 48 months from the first drawing

– Funds to be allocated to first, full payment of unpaid fees, second, costs related to the Vali project, and third, working capital and general corporate purposes

– Interest rate of 11.0%, reduced to 8.5% once certain operating cash flow conditions are met

– If Joint Venture agreements allow, first-rate security on Vintage assets

– Financial covenants include a minimum of $ 1.5 million in bank cash

– Costs include a 2% arrangement fee ($ 200,000) plus legal and due diligence costs (estimated at $ 130,000)

– In the event of early repayment of the facility by Vintage, a decreasing penalty of 1.5% to 1.0% of the funds applies

By virtue of a deed of subscription concluded at the same time and as provided for in the binding conditions sheet, the warrants for the amount of loan funds provided by PURE will be issued to PURE at the exercise price of 20 cents per share. , subject to the usual dilution adjustment mechanism, with more details in Annex 2A. The warrants may be exercised at any time up to 12 months after the loan repayment date (i.e. a term of 5 years) and may be used to repay debt or for other purposes. .

The issuance of warrants is subject to shareholder approval. Vintage will convene a General Meeting of Shareholders within three months of the date of this announcement to request approval of the issuance of the BSA. Further details regarding the warrants will be set out in the notice of meeting.

The main conditions precedent to the execution of the Facility and the first drawdown on the Facility are:

– The conclusion of a raw gas treatment agreement with the owners of Moomba’s infrastructure for the treatment of Vali gas, the discussions of which are underway; and

– Execution of a gas sales contract with AGL.

BurnView Corporate Finance continues as financial advisor to Vintage and was instrumental in securing the binding condition sheet for the Facility with PURE. Vintage thanks BurnView for his work on this transaction, the funds of which will be an important component of the financing of Project Vali.

About Vintage Energy Ltd

Vintage Energy LtdVintage Energy Ltd (ASX: VEN) was formed to acquire, explore and develop energy assets primarily in Australia, but not limited to, in order to take advantage of the generally favorable energy price outlook.

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