ABN 38 112 566 499
8 August 2016
GRIEVE PROJECT US$58 MILLION TERM LOAN COMPLETED
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Elk closes US$58 million Term Loan financing with Benefit Street Partners
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Grieve Project JV restructure funding now fully in place
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Significant oil hedging to be put in place to underpin Grieve Project cash flows
Elk Petroleum Ltd (ASX: ELK) ("Elk" or the "Company") is pleased to advise that is has completed closing a senior term loan facility with Benefit Street Partners ("BSP") for US$58 millionfor the Grieve CO2 EnhancedOil Recovery (EOR) Project ("Grieve Project") Joint Venture ("Grieve JV") restructure. Following the announced completion of the Grieve JV restructure, Elk completed full closing for the US$58 million term loan with BSP late Friday evening Dallas, Texas local time, on 5 August 2016.
Funds under the Term Loan facility with BSP are to be used to fund the US$ 55 million in field development expenditures committed to by Elk as part of the Grieve JV restructure and associated costs. Funds under the Term Loan facility are immediately available and Elk will be making its first drawdown under the Term Loan facility this week.
In conjunction with putting in place the Term Loan facility the Company will also be implementing a significant oil price hedging program to underwrite a strong oil price going forward for the Grieve Project. Under this program the Company anticipates hedging at least 75% of its share of estimated oil production from the Grieve Project for the first 2-years of production.
Elk Managing Director, Mr. Lingo commented: "We are extremely pleased to have been able to close both the Grieve Project restructure with Denbury Resources and the senior term loan with Benefit Street Partners one right after the other. With the term loan facility now closed and together with the equity the Company has raised so far as part of the entitlement offer, the completion of the Grieve Project is fully funded. It took a lot of hard work from both the Benefit Street and Elk teams to get this loan done so quickly and it's a credit to the strength and experience of the Benefit Street team and Elk looks forward to a long term relationship with this very important financier."
Mr. Lingo continued: "It is a true test of the quality of the Grieve Project and the strength of the restructured joint venture arrangements that have been secured that has enabled Elk to raise the funds in terms of both debt and equity needed to not only enable the Grieve Project to be completed but also to enable Elk to get a bigger overall stake in a very high quality
ELK PETROLEUM LIMITED
Suite 101, Level 1 Tel +61 2 9093 5400
10 Bridge Street
Sydney NSW 2000
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development. This project is expected to bring a long-term strong stream of cash flows to Elk which is why we have been able to secure such a strong debt package from Benefit Street."
Elk is being advised by Miro Advisors for the mandated senior loan facility.
For further information, please contact:
Brad Lingo
Managing Director/CEO P: +61 2 9093 5400
E: [email protected]
Alex Hunter
Chief Financial Officer P: +61 2 9093 5400
E: [email protected]
ABOUT ELK PETROLEUM
Elk Petroleum Limited (ASX: ELK) is an oil and gas company specialising in Enhanced Oil Recovery (EOR), with assets located in one of the richest onshore oil regions of the USA, the Rocky Mountains. Listed on the ASX in 2005, Elk's strategy is focused on applying proven EOR technologies to mature oil fields, which significantly de-risks the Company's strategy of finding and exploiting oil field reserves. Leveraging proven EOR technology and Company expertise and experience, Elk is currentlydeveloping the Grieve oil field in Wyoming (Elk - 35% WI) and is planning for a CO2-basedEOR project at the Singleton oil field in Nebraska (Elk - 100% WI & operator).
ELK PETROLEUM LIMITED
Exchange House Suite 101, Level 1
10 Bridge Street
Sydney NSW 2000
Tel +61 2 9093 5400