Central Petroleum Limited (CTP) (“Central”) advises that it has entered into an
agreement with Macquarie Bank Limited (“Macquarie”) for the expansion of its existing debt
facility (“Loan Facility”) for up to $12 million to fund increased production across its Amadeus
Basin gas projects.
Funding from the expanded facility will be available for Central’s share of up to six well
recompletions and two new development wells at the Mereenie field to be completed next
year (subject to final Joint Venture approval) with additional production expected to be sold
into an attractive east coast gas market.
The new facility consists of two separate tranches of $6 million, each of which can be activated
upon satisfaction of certain conditions precedent which include requirements that Macquarie
be satisfied that:
- Central’s capital commitments under agreed development plans and exploration
projects are fully-funded from available facilities and expected operating cash flows
for the term of the facility; and
- Certain new gas sale agreement thresholds are met.
Access to funds under a tranche will be cancelled unless the tranche has been at least partly
- For the first tranche, 31 December 2022
- For the second tranche, 31 December 2023.
Any funds drawn under the expanded facility will be repaid as follows:
- For the first tranche, 50% to repaid by quarterly equal instalments between the date
of utilisation and 30 September 2025.
- For the second tranche, 40% to be repaid by quarterly equal instalments between the
date of utilisation and 30 September 2025.
Central will pay a commitment fee on any undrawn facility funds equal to 40% of the facility
interest rate. Other key terms, including interest rate margin and financial covenants will
Central may elect not to utilise the unused portion of the expanded facility and may repay any
drawn funds at any time without penalty.
Central has granted Macquarie a royalty equal to 0.25% of the gross well head value derived
from a 35% participating interest in exploration permit 112 (Northern Territory) as part of the
consideration for the new facility.
Comments from the CEO
“This expansion of our existing loan facility provides flexible access to low-cost capital which
we can use to accelerate recompletions and new development wells at Mereenie, along with
other gas projects to increase gas supply to customers in the Northern Territory and eastern
states. These are long term investments in production capacity that are forecast to generate
strong forward revenues with ample debt service coverage,” said Central’s Managing Director
& CEO, Leon Devaney.