Calgary, Alberta (FSCwire) – Canadian Overseas Petroleum Limited ("COPL" or the "Company") (XOP: TSX-V) & (COPL: LSE), an international oil and gas exploration and development company, is pleased to announced that its 50% owned joint venture company, Shoreline Canadian Overseas Petroleum Development Corporation ("ShoreCan"), has received and agreed to a project financing and offtake agreement term sheet (the "Term Sheet"), providing for a minimum US$30 million to a maximum of US$50 million Senior Secured Facility (the "Facility"), for investment by ShoreCan into its 80% owned affiliate Essar Exploration and Production Limited (Nigeria) ("Essar Nigeria") from The Mauritius Commercial Bank Limited ("MCB") and Trafigura PTE Ltd. (Trafigura").
The Facility would provide funding for all production related expenditures following the drilling and testing of the initial production well to be drilled by Essar Nigeria on its 100% contracted interest in OPL226, which is located in shallow to mid-water offshore Nigeria. Drawing on the Facility is contingent on among other things:
- An additional US$20 million to US$33 million of funding from ShoreCan;
- US$100 million funding from an offshore oil services group ("Service Provider") to deliver the project;
- A minimum of 6,000 bbl./d production rate averaged over 20 days;
- The execution of a formal definitive binding agreement between the parties
Other material terms of the proposed Facility include the following: Two-year term to maturity; and a grant to the lenders of US$3 million worth of warrants to purchase COPL common shares for two years with an exercise price equal to the market price of the COPL common shares on the date of closing of the Facility.
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Source: Canadian Overseas Petroleum Limited (TSX Venture:XOP, LSE:COPL)
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