Empyrean Energy talk Macquarie Bank Facility Re-finance and drawdown

PUBLISHED: 02 Apr 2015 @ 08:06 | Comments (0) |

Macquarie Bank Facility Re-finance and drawdown

Empyrean Energy, aprofitable US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, has announced that it has reached an agreement with Macquarie Bank Limited for additional debt funding under Tranche B of its facility.

The further proceeds from the Facility will be used to finance the Company’s continued participation in the continued development of its flagship Sugarloaf AMI Project in onshore Texas.

Empyrean has a 3% working interest in the Project, which is operated by Marathon Oil Company, a subsidiary of US major Marathon Oil Corporation (NYSE:MRO).

Macquarie has agreed to make US$11,000,000 available to the Company immediately under the Facility and has indicated that further amounts may also be available in due course, subject to satisfaction of certain conditions, including further credit approvals and well performance and reserve hurdle criteria.

The total amount outstanding on the Facility following the drawdown and the scheduled repayment of US$1 million on 31 March 2015 will be US$21.67 million.

The interest rate payable on the Facility will remain unchanged at 9% p.a. plus LIBOR. The Company has also restructured the amortisation and repayment profile of the Facility, such that loan repayments will be reduced to US$1,000,000 per quarter commencing 31 March 2015 through to 30 June 2016, after which they will increase to US$3 million, US$4 million, US$5 million and US$6 million on 30 September 2016, 31 December 2016, 31 March 2017 and 30 June 2017 respectively.

In order to secure the financing described above, the Company has conditionally agreed to issue a further tranche of options to Macquarie in respect of 15,000,000 ordinary shares in the Company at an exercise price of £0.10 per Option and with an expiry date of 4 years from the date of issue of the Options. The Company does not currently have sufficient authority to enable the grant of the Options and, accordingly, Shareholder approval will be sought for the grant of the Options at a meeting to be held on or before 27 July 2015. In the event that such Shareholder approval is not obtained, the Company will be required to pay to Macquarie an amount in cash or other consideration acceptable to Macquarie having a value equivalent to the Options which have not been granted. In addition, the Company is required to enter into hedging arrangements acceptable to Macquarie in respect of a portion of its production.

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