Strike Energy Announces Terms Agreed for $153M Development Funding Package

Source: 6/21/2024, Location: Not categorized

- Terms agreed with Macquarie Bank for the provision of a 5 year, $153 million financing package which includes:
- A $60 million facility to refinance $16.3 million of existing drawn debt $43.7 million of existing approved but undrawn development facilities.
- $93 million of new debt to support the development of South Erregulla and West Erregulla contingent on Macquarie internal approvals.
- The facility is underwritten by the production performance at the Walyering gas field and demonstrates the lowering of financing costs as Strike’s development portfolio progresses and their risk profiles reduce.

Strike Energy Limited (Strike - ASX: STX) is pleased to announce that it has reached agreement with Macquarie Bank Limited (“Macquarie”) for the refinancing of the existing debt package to fund production upgrades, pre-development and development costs across its Perth Basin portfolio of assets. Provision of the facilities is subject to execution of the definitive financing documentation. The financing package is comprised of three facilities:

- A $60 million facility to refinance the existing drawn debt of $16.3 million and to provide development capital of $43.7 million for Walyering, West Erregulla and general working capital purposes;
- A $53 million facility to support the development of South Erregulla; and
- A $40 million facility to support the development of the West Erregulla Gas Project.

The facility has a 60-month tenor, capitalising interest, and a 6% coupon plus bank bill swap rate. There are no principal repayments until 31 December 2026 after which the drawn principal amortises on a quarterly basis for the remaining term of the loan.

Drawdown of the facilities is subject to customary conditions for facilities of this kind and, in the case of the South Erregulla and West Erregulla facilities, Strike taking a final investment decision (FID) on those projects respectively and Macquarie internal approvals. The facilities will be provided subject to financial, corporate and project related undertakings and covenants customary for these types of arrangements. The existing security package granted to Macquarie in respect to the current facility will remain in place as security for the refinanced package.

Strike’s Chief Executive Officer & Managing Director Stuart Nicholls said: “This financing package provides the funding clarity for Strike’s Gas Acceleration Strategy made up of a series of highly attractive Perth Basin energy assets. The lowering of the Company’s cost of capital is commensurate with the advanced stage and derisking of its production and development portfolio.”

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