The Trinidad based junior oil producer has agreed with BNP Paribas an early end to a funding deal, set up in February, and the bank will allow reduced repayment rates (of US$75,000 per month) for the next three months.
"As the company and the industry as a whole adjusts to the sustained low oil price environment, we are pleased to have reached this agreement with BNP Paribas,” said Neil Ritson, LGO chief executive.
“This will provide a firm financial platform for LGO to maintain the momentum of our oil production operations in Trinidad."
At the close of the facility LGO owed the bank US$10.8mln, and from February 2016 onwards it will repay the balance at a rate of 5% per month, for a period of 19 months.
It is therefore anticipated that the debt will be repaid no later than September 2017.
LGO said it continues to have regular constructive discussions with the bank aimed at assisting LGO establish a secure and sustainable platform for future investment.
At the same time the company’s advisors Wellford Capital Markets and Height Securities are working con potential strategic investment deals.
“LGO expects to be actively discussing potential investments with clients of Wellford and Height during the next two months,” the company said in a statement.
“Further updates will be provided in due course.”
On AIM, LGO shares rallied 0.18p, or 36%, to trade at 0.65p each.