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Columbus Energy Resources announces medium-term funding agreement of up to USD4.5 million
11 Nov 2019
Columbus, the oil and gas producer and explorer with operations in Trinidad and Suriname, has agreed to terms for a new Convertible Loan Agreement with Lind Global Macro Fund an entity managed by The Lind Partners to provide access to additional funds, should they be required, to:
- assist with any un-planned additional costs arising from the drilling of the Saffron well in Trinidad;
- enable Columbus to fast-track the appraisal and development of the Saffron prospect following any discovery; and
- provide the resources to fast-track planned technical and operational activities on the Weg Naar Zee licence in Suriname, including development of the field following the extended well tests.
The Agreement provides Columbus with access to a medium-term funding which is available for drawdown in three separate tranches, the first US$1.5 million tranche being drawn-down immediately with two further US$1.5 million tranches being available for drawdown in future, subject to certain conditions.
The Agreement effectively replaces the facility entered into in 2016 under which Columbus has recently made the final repayment of amounts drawn-down in December 2016 and October 2017. The Company has made total repayments to the Funder under the previous facility of approximately US$3.2 million since January 2017. Apart from two exceptions, all monthly payments were made in cash.
Leo Koot, Executive Chairman of Columbus, commented:
'The Company is currently drilling the Saffron well, with operations and costs in line with our previous expectations. As with any drilling campaign, it is prudent to have sufficient cash resources to complete the well if the Company encounters unexpected operational delays or unexpected hazards. In addition, Columbus wishes to have the financial flexibility to enable us to move forward with the appraisal and development of a Saffron discovery and speed up our plans in Suriname to unlock the potential of the Weg Naar Zee opportunity we recently announced. The Funding provides the Company with that flexibility and also provides a 'financial insurance policy' for the Company going forward.
The Company's past experience with Lind, who have provided similar facilities in 2016 and 2018, gives us comfort that the Funding is the right way to provide the working capital should it be needed to cover unexpected costs and will also enable Columbus to progress our plans faster than might otherwise be the case, should this make good business sense in 2020 and beyond.
The Company believes that the Funding is value accretive for our shareholders as it minimises equity dilution whilst providing financial flexibility at minimal cost. I am delighted to be able to continue our excellent relationship with Lind who have proved to be a very supportive partner for Columbus over the past few years.
We have not yet decided whether we will draw upon the second and third tranches which are available to us and will keep the market informed of our plans as we progress into 2020. I would stress that the Company remains committed to finding the lowest cost options for appraising and developing its assets and will judge any further drawdown under the Agreement against other options at the time.'
Source: Columbus Energy Resources