Savannah Petroleum PLC, the British independent oil and gas company focused around oil and gas activities in Niger and Nigeria, is pleased to announce the signature of a term sheet with a leading Geneva-based oil trading firm, for a new US$50m debt facility.

The Facility comprises an initial committed amount of US$20m, plus an additional uncommitted amount of a further US$30m, and can be drawn in minimum tranche sizes of US$5m. Facilities monies are envisaged to be available for general corporate purposes, other than debt service. The interest rate payable under the Facility is LIBOR plus 6%, with interest payments due annually. The first years’ interest can be capitalised and added to the principle amount of the Facility at Savannah’s election.

Drawing of the Facility is available upon satisfaction of various conditions precedent, including finalisation of relevant documentation. The Facility will terminate three years from the date of satisfaction of these conditions. The terms of the Facility include a Utilisation Fee of US$1m payable on the initial utilisation of the Facility plus a further US$1m only payable on the first utilisation of the Facility that occurs following the increase in the Facility to US$50m.

In the event that the Facility is utilised, the Lender will be granted a right of first refusal for any of Savannah’s oil trading activities for a period of five years in Nigeria (excluding those in relation to the Seven Assets) and in Niger (for any oil produced from the R3/R4 PSC and exported to an internationally recognised export terminal only).