Baku, Azerbaijan, Jan.6
By Leman Zeynalova – Trend:
Canada’s Zenith Energy Ltd. has reached an agreement to provide a secured loan facility to Anglo African Oil & Gas plc (AAOG) for a total amount of £250,000, Trend reports with reference to the company.
The purpose of the Facility is to assist AAOG in addressing its immediate working capital requirements following the signing of a conditional share purchase agreement for Zenith's acquisition of an 80 percent interest in AAOG's fully owned subsidiary in the Republic of the Congo, Anglo African Oil & Gas Congo S.A.U (AAOG Congo).
The Facility will be available, inter alia, subject to AAOG shareholder approval of the conditional SPA announced on December 27, 2019, on 25 January 2020 regardless of whether all the conditions for completion of the Acquisition have taken place.
The Facility will for an initial period of 6 months from January 25, 2020 and may be extended by a further 3 months if completion of the Acquisition (which following the approval the General Meeting would be conditional, inter alia, upon Ministerial consent in the Republic of Congo) has not occurred.
The Facility will be repayable at any time by AAOG with no early repayment penalties and will have an interest rate of 5 percent per annum which will be payable on final repayment.
Zenith shall set off sums payable by it to AAOG pursuant to the SPA against the Facility, which means the Facility is essentially an advance on sums payable by Zenith to AAOG pursuant to the SPA. The Facility will be secured on the shares in AAOG Congo.
Zenith Energy is the operator for the development of Muradkanli-Jafarli-Zardab block of fields onshore Azerbaijan.
Azerbaijan’s state oil company SOCAR and Zenith Aran Oil Company signed a REDPSA in March 2016 for a block that includes the Muradkhanli, Jafarli and Zardab oil fields. Zenith Energy Ltd established its subsidiary company Zenith Aran Oil Company Ltd for production operations in these three fields. Production under the agreement began in August 2016.
Zenith holds an 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The agreement is for 25 years, with a potential extension by five additional years.
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