PetroNeft, an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67, today provides a financing update.

Highlights

New $2.9m convertible loan facility providing greater headroom to develop value.

Loan facility

PetroNeft has entered into a convertible loan facility of US$2.9 million with a group of thirteen lenders that matures in March 2023.

The loan facility will be used for general corporate and ongoing operational purposes and carries an interest rate of 8% above the base rate of the Bank of England. Lenders can elect at any time to convert up to 75% of the outstanding loan to shares at a conversion price of stg£0.02 in year 1 and stg£0.025 in year 2.

The funding secured by the Company will support our key operational priorities which are expected to deliver considerable news flow in the near to medium term, these priorities include:

• Licence 67; bringing the Cheremshanskoye field on stream for year round production and completing the infield infrastructure work including the all season road. Mobilising to the Ledovoye field to carry out a work over program aimed at proving up well productivity to enable field production. Continuing to improve our knowledge and understanding of the two fields to optimise the capital allocation model for future development plans. 
• Licence 61; continuing 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 is also focused 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. 

The loan is being provided by a group of thirteen investors. Five of the investors are related parties (as defined in the AIM Rules and Euronext Growth Market Rules).

David Sturt, CEO of PetroNeft Resources plc, commented:
“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.

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.”

KeyFacts Energy: PetroNeft Russia country profile