(Sharecast News) - Russia-focussed oil and gas exploration and production company PetroNeft announced a new $2.9m convertible loan facility on Wednesday, providing greater headroom for it to develop value.
The AIM-traded firm said the facility was with a group of 13 lenders, and would mature in March 2023.
It said it would be used for general corporate and ongoing operational purposes, and carried an interest rate of 8% above the Bank of England base rate.
Lenders could choose to convert up to 75% of the outstanding loan to shares at any time, at a conversion price of 2p in the first year and 2.5p in the second year.
The funding would support its key operational priorities, the board said, which were expected to deliver "considerable" news flow in the near-to-medium term.
Those priorities included bringing the Cheremshanskoye field on stream at licence 67 for year round production, and completing the infield infrastructure work, including the all-season road.
It would also mobilise to the Ledovoye field on the same licence to carry out a workover programme aimed at proving-up well productivity, to enable field production.
At licence 61, the firm said it would continue to improve production performance through selected low capital but high reward projects, such as the current fracking program and optimisation of water flood programs at the fields.
The company said it was also focussed on analysing ways to unlock the "significant potential" within the northern hub complex, being the West Lineynoye and Sibkrayevskoye fields, and the large Emtorskaya prospect.
"We are pleased with this fundraising which includes participation by new investors and demonstrates the continued support from our larger shareholders as we continue to rebuild value in the business," said chief executive officer David Sturt.
"This two-year facility provides additional financing head room to the company and allows management to further focus on operations as we continue to improve the performance of our assets and deliver value to our shareholders.
"Not only does this give greater security, it allows management to further focus on development and operations."
At 1431 GMT, shares in PetroNeft were down 9.68% at 1.4p.
3 Jan 2024 08:04
IN BRIEF: PetroNeft shares to be cancelled from AIM amid Russia exit
PetroNeft Resources PLC - oil and gas producer in Russia - Shares will be cancelled from trading on AIM in London on Thursday, as PetroNeft continues ...