logo-loader
viewCabot Energy PLC

Cabot Energy reveals new funding arrangements for Canadian assets

“Signing a term sheet for a significant amount of credit with a specialist lender in Calgary is an important building block in our plans to execute our growth strategy,” said chief executive Scott Aitken.

Cabot Energy plc - Cabot Energy reveals new funding arrangements for Canadian assets
Significant shareholder H2P is supporting a share subscription and open offer

Cabot Energy Plc (LON:CAB) has updated on its financing arrangements as it enters into a term-sheet for a C$5mln loan.

The non-binding term sheet with a private energy lender is expected to be at asset level and would be non-recourse to Cabot.

It is proposed that Cabot would borrow with an 11.5% interest rate with maturity set at 30 September. The arrangement comes with C$75,000 of commitment fees and also provides a 2% participatory interest in gross revenue gross over the term of the loan.

The proceeds would fund a winter work programme which will comprise four new horizontal development wells to produce existing proven reserves.

“Signing a term sheet for a significant amount of credit with a specialist lender in Calgary is an important building block in our plans to execute our growth strategy,” said chief executive Scott Aitken.

Additionally, Cabot informed investors that it has separately a share subscription agreement has been signed with High Power Petroleum LLC (H2P), an existing significant shareholder in the company, which will see some US$300,000 of new capital raised to support a summer work programme.

Further funds could be raised via an open offer to qualifying existing shareholders, including H2P which can purchase up to US$700,000 of additional new shares.

"We are pleased to have entered into a term sheet to debt-fund the winter work programme and secure equity funding from our supportive majority shareholder, h2p, to fund the summer work programme,” said James Dewar, Cabot’s interim chairman.

Aitken, meanwhile, highlighted: “With the H2P funding we can commence a summer work programme of nine well workovers and stimulations which will, subject to the satisfaction of the loan facility conditions precedent, enable access to the debt facility, then undertake a winter work programme of drilling four new horizontal development wells totalling a minimum US$7.0 million investment. 

“Following this investment, management believe the winter work programme will have a positive impact on operations and overall production levels."

Quick facts: Cabot Energy PLC

Price: - -

AIM:CAB
Market: AIM
Market Cap: -
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Cabot Energy PLC named herein, including the promotion by the Company of Cabot Energy PLC in any Content on the Site, the Company receives from...

FOR OUR FULL DISCLAIMER CLICK HERE

2 min read