MXP.L Regulatory News (MXP)

12 Apr 2007 08:11

Max Petroleum PLC12 April 2007 MAX PETROLEUM PLC (AIM: MXP) COMMITMENT FOR $100 MILLION SUBORDINATED DEBT FACILITY Max Petroleum Plc ("Max Petroleum" or "the Group"), an oil and gas explorationand development company focused on Kazakhstan, has obtained a commitment fromMacquarie Bank Limited ("Macquarie") to enter into a $100 million seniorsubordinated debt facility to finance the development of Max Petroleum's oil &gas assets in Kazakhstan. Closing of the facility is subject to the completionof standard due diligence, applicable regulatory approvals, legal documentationand fulfilment of standard terms and conditions for a debt financing of thisnature. Upon closing, the debt facility will have a four-year term and bear interest ata rate ranging from LIBOR plus 4% to LIBOR plus 6.5%, depending upon theunderlying value of the Group's proved oil and gas reserves. The facility willhave an aggregate commitment of $100 million with an anticipated initialborrowing base of $20 million to be used to fund Max Petroleum's appraisal anddevelopment of the Zhana Makat field on Block E. The borrowing capacity underthe facility will be subject to review and adjustment on a periodic basis,principally to fund additional exploration and development projects, with thetotal availability at any given time subject to a number of factors, includingcommodity prices and reserve levels. Under the terms of the debt facility,Macquarie will receive a five-year warrant to acquire 7.5 million ordinaryshares in Max Petroleum at an exercise price of 160.6p per share. The exerciseprice of the warrant is calculated using a 25% premium to the 30-day volumeweighted average closing price of Max Petroleum's ordinary shares prior to April6, 2006, the date the commitment letter was executed between the parties. Futureincreases in the borrowing base beyond $20 million will also trigger the furtherissuance of warrants to Macquarie to acquire up to 12.5 million additionalshares in Max Petroleum at an exercise price equal to the higher of i) a 10%premium to the 30-day volume weighted average price prior to issuance or ii) theprevailing conversion price of the Group's outstanding convertible debt(approximately £1.33 per share). The additional warrants, if any, will be issuedin 2.5 million share increments for each $10 million in additional borrowingcapacity made available to the Group. Jim Jeffs, Executive Chairman, commented: "Entering into a project finance facility with Macquarie will greatly enhanceour liquidity as we execute our long-term exploration and development programmefor our extensive asset base in the Pre-Caspian Basin. Specifically, thisprovides us with the financial flexibility to appraise and develop shallow andintermediate discoveries without limiting our ability to effectively financemore capital intensive exploration projects going forward. It has also beensecured on attractive terms with a partner who recognises the value across ourportfolio of assets." 12 April 2007 Enquiries: Max Petroleum PLC Michael B. Young T: +44 (0)20 7355 9590 Chief Financial Officer Peter Moss T: +44 (0)7834 572837 Investor Relations Manager Merlin Tom Randell T: +44 (0)20 7653 6620 David Simonson WH Ireland Ltd Paul Dudley T : +44 (0) 20 7220 1666 James Joyce E : paul.dudley@wh-ireland.co.uk james.joyce@wh-ireland.co.uk This information is provided by RNS The company news service from the London Stock Exchange