Decklar Announces Finalization of Debt Financing Arrangements With Shell for Development of Oza Oil Field
September 29 2022 - 8:30AM
Decklar Resources Inc. (TSX-V: DKL) (OTCQX: DKLRF) (FSE:
A1U1) (
the “Company” or “Decklar”) is
pleased to announce the closing of a US$20 million debt finance
facility from Shell Western Supply and Trading Limited (“Shell”), a
crude oil and petroleum product subsidiary of Shell plc., for the
continued development of the Oza Oil Field in Nigeria.
Decklar and its co-venturer Millenium Oil &
Gas Company Limited (“Millenium”) are pleased to announce the
execution of a US$20 million debt finance facility with Shell (the
“Development Debt”). The Development Debt has a tenure of five
years.
Upon meeting certain outstanding conditions
precedent to drawdown for the Development Debt, the Development
Debt will be disbursed in three tranches based on development
drilling activities on the Oza Oil Field. Proceeds of the
Development Debt will be used to fund development activities on the
Oza Oil Field, including the re-entry of existing wells, drilling
of new wells, and related infrastructure. The new development wells
are anticipated to have dual-zone completions with two oil
producing zones simultaneously using two individual tubing strings.
The full field development plan for the Oza Oil Field is
anticipated to include the drilling of eight or nine new wells and
the re-entry of two existing wells. As previously announced,
Millenium’s historical debt has been restructured under similar
terms to the Development Debt.
In accordance with the requirements of the
Development Debt, Decklar has executed a facility agreement and an
offtake agreement with Shell. The facility agreement in respect of
the Development Debt includes a hedging program to allow for a put
option hedging structure to manage exposure to fluctuations in the
price of crude oil. It will be managed by
Shell/Decklar/Millenium.
As recently announced, the Oza-1 well will be
placed back on production once evacuation commences.
Sanmi Famuyide, CEO of Decklar Resources, said
“We are very pleased to announce the successful execution of the
US$20 million debt financing with Shell, which is an important
milestone for the Oza Oil Field development. The debt financing
participation by Shell reflects a validation of Decklar’s plans for
full development of the Oza Oil Field.”
For further information: Sanmi
FamuyideChief Executive Officer Telephone: +234 703
332 2265Email: sanmi@decklarresources.com
David HalpinChief Financial Officer Telephone: +1
403 816 3029Email: david.halpin@decklarresources.com
Investor Relations: info@decklarresources.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Language
Certain statements made and information
contained herein constitute "forward-looking information" (within
the meaning of applicable Canadian securities legislation),
including, but not limited to, statements regarding: the Company’s
ability to meet all of the conditions precedent to drawdown all
three tranches of the Development Debt, the use of proceeds from
the Development Debt, the ability of the hedging policy to manage
exposure to fluctuations in the price of crude oil, the Company’s
ability to properly fund its development plans for the Oza Oil
Field using the Development Debt and cash flows, commencement of
trucking to a local refinery and oil storage and export facility
and the timing thereof, the completion of two new well re-entries
on the Oza Oil Field and the timing thereof, the drilling of eight
to nine new wells on the Oza Oil Field and the timing thereof and
any new development wells having dual-zone completions with two oil
producing zones simultaneously using two individual tubing
strings.. All statements in this news release, other than
statements of historical facts, are forward-looking statements.
Such statements and information (together, "forward looking
statements") relate to future events or the Company's future
performance, business prospects or opportunities.
All statements other than statements of
historical fact may be forward-looking statements. Any statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words
or phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect, "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions) are not statements of historical
fact and may be "forward-looking statements". Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in
those forward-looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct and
such forward-looking statements should not be unduly relied upon.
The Company does not intend, and does not assume any obligation, to
update these forward-looking statements, except as required by
applicable laws. These forward-looking statements involve risks and
uncertainties relating to, among other things, counterparty risk,
changes in oil prices, results of exploration and development
activities, competition in the oil and gas industry, uninsured
risks, energy transition risks, regulatory changes, defects in
title, availability of materials and equipment, timeliness of
government or other regulatory approvals, actual performance of
facilities, availability of financing on reasonable terms,
availability of third party service providers, equipment and
processes relative to specifications and expectations and
unanticipated environmental impacts on operations. Actual results
may differ materially from those expressed or implied by such
forward-looking statements.
The Company provides no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company
does not assume the obligation to revise or update these
forward-looking statements after the date of this document or to
revise them to reflect the occurrence of future unanticipated
events, except as may be required under applicable securities
laws.
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