Oil and gas exploration company, Petsec Energy Limited (ASX: PSA) made an announcement on 20 December 2018 regarding an extension of the redemption date for the US$15mn Convertible Note Facility from 23 January 2020 to 23 January 2021. The company also announced a variation in terms for Tranches 2 and 3 of the Facility with the purpose of supporting Petsec Energy’s cost of drilling, completion of production. The variation will also support the production facilities for the Hummer Development Project and the company’s operations in the regions of the US and Yemen.
The funds from the tranche 1 of the Facility were used for the development of the Hummer gas/oil discovery in the USA which includes building and installation of a 4-pile jacket, completion, and testing of the initial well, and construction of the production facilities on the Main Pass Block 270 Field.
In February 2018, the Company re-established Tranche 2 of the Convertible Note Facility to provide funding flexibility for costs which are related to the re-start of production at the An Nagyah Oilfield in the company’s Damis Facility which is located in Yemen. The variation in the second tranche will provide access to additional funding for any of the Company’s operations, but mainly the development of the Main Pass 270 gas/oil Field. The drawdown date of the tranche two has extended from 23 January 2019 to 23 January 2020. The facility amount of the tranche 2 is US$5 million which is fully available.
In May 2018, the company re-established the third tranche of the Convertible Note Facility to provide access to a further US$5mn to fund the company’s share of drilling and completion costs associated with the proposed Hummer B-2 appraisal/development well which is located in the USA. Currently, the Tranche 3 is drawn down by US$2.5mn, with US$2.5mn presently available to be drawn. The Drawdown date of the tranche three has extended from 23 January 2019 to 23 April 2019.
The variation to terms and the extension of the US$15mn Convertible Note Facility will provide Petsec Energy necessary funding and flexibility to deliver the completion and production of the B-2 appraisal/development well currently being drilled and the ongoing efforts to restart production at the An Nagyah Oilfield in Yemen.
In the last six months, the share price of PSA decreased by 35.48 percent as on 19 November 2018. PSA's shares traded at $0.100 with a market capitalization of circa $33.36 million as on 20 November 2018 (AEST 4:00 Pm).
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