(Alliance News) - Europa Oil & Gas Holdings PLC on Wednesday announced it has entered into a GBP225,000 unsecured loan facility with Non-Executive Director William Ahlefeldt.
The UK, Ireland and Morocco focused oil and gas company said it has taken out the loan facility to increase its headroom to fund any cost overruns or funding shortfalls that may arise relating to the Wressle oil field development in North Lincolnshire, England. The loan facility has a four-month term and an interest rate of 13% per annum.
Shares in Europa Oil & Gas were up 13% at 1.52 pence in London on Wednesday.
Europa said operations at the Wressel-1 well are underway and it expects to begin production from the Ashover Grit reservoir at the end of this month, at a constrained gross rate of 500 barrels of oil per day. At this rate, its existing UK onshore production would more than double to around 200 barrels of oil per day, it added.
Chief Executive Simon Oddie said: "This loan facility is one of the financing options that we have been exploring to increase the company's headroom to fund any cost overruns that may arise following the decision of the partners to defer the workover operations and final commissioning of the Wressle field to January 2021.
"Once Wressle starts to produce, which is expected by the end of this month, our production and financial profile will be transformed. This in turn will provide us with a much stronger funding platform with which to pursue the multiple growth opportunities across our portfolio."
By Zoe Wickens; zoewickens@alliancenews.com
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Europa Oil & Gas (EOG)