COPL receives project financing term sheet for Nigerian oil and gas assets

COPL 31The project involves the drilling and completion of a horizontal oil production well in Nigeria. (Image source: Cathy Whitfield/Flickr)Shoreline Canadian Overseas Petroleum Development Corporation (ShoreCan), a joint venture company of Canadian Overseas Petroleum Limited (COPL), has received project financing term sheet for Essar Exploration and Production Limited (Nigeria) (Essar Nigeria)

ShoreCan has received the term sheet from The Mauritius Commercial Bank Limited (MCB) and Trafigura PTE Ltd (Trafigura).

The Facility would provide funding for all production related expenditures following the drilling and testing of the initial production well to be drilled by Essar Nigeria on its 100 per cent contracted interest in OPL226, which is located in shallow to mid-water offshore Nigeria.

Drawing on the Facility is contingent on among other things:

· An additional US$20mn to US$33mn of funding from ShoreCan

· US$100mn funding from an offshore oil services group to deliver the project

· A minimum of 6,000 bbl per day production rate averaged more than 20 days

· The execution of a formal definitive binding agreement between the parties

Other material terms of the proposed Facility include a two-year term to maturity and a grant to the lenders of US$3mn worth of warrants to purchase COPL common shares for two years with an exercise price equal to the market price of the COPL common shares on the date of closing of the facility.

The project involves the drilling and completion of a horizontal oil production well offsetting the 2001 NOA#1 oil discovery well and the drilling and completion of two to three additional high angle oil production wells in the adjacent NOA East fault block from a common wellhead platform and placing these wells on production in an approved early production scheme.

Essar Nigeria has prepared a work programme for this initial campaign on OPL226 in the form of a field development plan (FDP) for submission to the Concessionaire, NNPC. The company expects the presentation of the FDP to NNPC to occur in the near term.

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