29th Sep 2015 14:40
LONDON (Alliance News) - Madagascar Oil Ltd said Tuesday it has reached a deal with four major shareholders to provide a bridge financing facility of up to USD21.9 million, to help finance the company as it identifies a potential partner or partners for its Tsimiroro field in Madagascar.
The company has appointed Jefferies International Ltd to assist the company in the process of identifying a potential strategic partner for the development and funding of the field.
The new facility will incorporate the company's existing USD5.0 million working capital facility provided by an associate of Outrider Management LLC. Outrider, alongside Benchmark Advantage Fund Ltd, SEP African Ventures Ltd, and the John Paul Dejoria Family Trust are the four shareholders providing the bridge financing.
The company said it has opted to scale down its operations from its steam flood pilot at the project, as a result of a potential storage capacity constraints, and the challenging oil price environment. The partner process is making steady progress, the company said, including interest from "a number of credible parties." It aims to finalise a transaction by the end of the first quarter of 2016.
"Current market conditions remain challenging for a number of oil and gas companies, particularly with respect to short term financing and we are pleased that we have now secured the financing that enables us to focus on meeting our strategic objectives through the partner process," said Chief Executive Officer Robert Estill in a statement.
Shares in Madagascar Oil were up 11.3% at 4.45 pence Tuesday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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