Non-binding Heads of Terms agreed for £20 million Global Refinance
Appointment of Subsurface and Wells Lead
· £20m debt facility agreed with Trafigura PTE Ltd (“Trafigura”) to refinance all existing debt and fund additional capex projects to raise production at Saltfleetby Field
· 5 year amortising term with one year repayment grace period and reduced cash sweep for accelerated repayment
· Interest margin over SONIA of 8% compared to 12% on existing senior debt and 15% on bridge facility
· All existing senior and bridge debt to be repaid
· Medium-term capex needs fulfilled
· Trafigura to act as Offtaker
· Existing hedge contract to be replaced with a fixed price offtake
· Work on gas storage feasibility to be accelerated with funds from the new facility and revised subsurface mapping
Further to the Company’s announcement of 14 July 2023 and subsequently, Angus is pleased to confirm that it has now entered into detailed, non-binding, heads of terms (“Heads of Terms”) for a GBP20 million senior secured debt facility (the “Refinance Facility”) with Trafigura and has received indicative approval from the lenders under the Company’s existing senior secured loan facility to proceed. The Company has now to agree definitive documentation after which it will proceed to completion and drawdown. Trafigura has provided an expected closing date during the course of January 2024.
The Refinance Facility will be used to repay existing senior and bridge debt (presently c. £5 million and £6.7 million respectively) and reduce the deferred consideration due to Forum Energy (presently c. £5 million) as well as to initiate expenditure on a fourth well at Saltfleetby to be completed by Q1 2025.
As part of closing of the Refinance Facility, Trafigura will work with the Company’s existing hedge provider to organise an orderly transfer of the existing hedge obligations which run until June 2025. A dynamic rolling gas price protection programme has been agreed which will provide protection at least until the scheduled maturity date of the Refinance Facility. The offtake arrangement with Trafigura will be substantially in line with the existing gas sales agreement; physical fixed price contracts will be entered into on part of the production to cover the existing hedge position until June 2025 and for risk management beyond that.
The headline term of the Refinance Facility is 5 years with even quarterly amortisation payments after an initial repayment holiday of 12 months. Additionally, there is a cash sweep whereby 50% of Angus’ revenues (after deducting all group wide costs, including financing charges) are to be applied each quarter to redeem the loan. To the extent that sweep repayments are made, the even quarterly amortisation payments will be adjusted.
The Refinance Facility has been arranged by Aleph Commodities Limited (“Aleph”). Total arrangement fees to Aleph and Trafigura for the new facility are subject to final agreement. Final terms will be confirmed in an announcement of the definitive agreement and will be dealt with in accordance with AIM Rule 13 as appropriate at that time. Similarly, the revised arrangement with Forum Energy will be dealt with in accordance with AIM Rule 13 as appropriate at that time.
The Heads of Terms also include standard terms on change of control, covenants and events of default.
Detailed terms will be released on completion of documentation which is expected to conclude early in the New Year.
New Appointment
The Company is pleased to announce that Ross Pearson, former Technical Director of Star Energy plc (formerly IGAS plc) is joining the Company as the lead on all wells and subsurface activity. An options package of 25,000,000 options at 0.67p has been agreed with vesting dates being subject to contract milestones.
Enquiries:
Angus Energy Plc www.angusenergy.co.uk
Richard Herbert Tel: +44 (0) 208 899 6380
