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Grand
Gulf Energy Limited
Suite 8, 7 The Esplanade
Mt Pleasant 6153
Western Australia
T +61 (0) 8 9324 3011
F +61 (0) 8 9324 3055
E info@grandgulf.net
www.grandgulfenergy.com
ABN 22 073 653 175
ASX GGE
ASX/Media
Release
29th April 2008
Napoleonville Salt Dome update and Macquarie Bank Credit Facility
________________________________________________________________
Grand Gulf Energy Limited (Grand Gulf) is pleased to
provide an overview on its operations generally and in particular an update on its
26.3% owned Napoleonville Salt Dome project in Assumption Parish, Louisiana USA
and to announce that it has signed a Term Sheet for a Credit Facility with
Macquarie Bank of US$50 million with an initial Borrowing Base of US$2.5
million.
Since the last Napoleonville update on 20th February 2008 the
Operator has continued geophysical, geological and reservoir engineering work
and has now increased the number of leads and prospects around the
Napoleonville Salt Dome from some 29 to over 50. These range from
“PUD” type prospects to exploration prospects. PUD type prospects
are those that are identified as being updip and in the same fault block as
former producing wells around the Salt Dome.
The Operator has so far nominated the first two Prospects to be drilled
in 2008 as part of up to four wells to be drilled in 2008.
Grand Gulf CEO Mr James Trimble said “We are now seeing the
enormous potential of the Napoleonville Salt Dome unfold. This potential is not
only in and around existing and previous production but also identified through
the entire prospective section around the salt dome. We can now
confidently interpret the edge of the salt and show where untapped oil and gas
reservoirs are located updip or along trend from existing wells. The
excellent quality of the 3D is akin to that obtained offshore where significant
production has been achieved from traps under salt overhangs similar to those
now being identified at Napoleonville. The 3D data are also yielding a
number of direct hydrocarbon indicators which are being used to highgrade the
extensive list of leads and prospects. The US$2.5 million from Macquarie
Bank together with the US$2.3 million to be received from the sale of the Fee
Minerals will allow us to drill the initial wells at Napoleonville as well as
continue with our development activities in Oklahoma
and Texas.”
“With record oil prices over $100 per barrel and gas prices in the
US at over $9 per thousand cubic feet the economics of the prospects are
extremely good’ Mr Trimble said.
“Many of the over 50 leads will be drilled over the next few
years. We are starting the drilling with the PUD type prospects and will also
look to drill at least one of the larger exploration prospects this year.
These prospects range in size from 1.5 Bcfe for the PUD features to over 50
Bcfe for the exploration prospects with both oil and gas targets’ Mr
Trimble said.
To view presentation, please click on the link below:
http://www.grandgulfenergy.com.au/documents/602.pdf
Macquarie Bank Credit Facility
Closing and funding of the $50 Million Credit Facility will be subject
to the negotiation, execution and delivery of definitive loan and security
documentation acceptable to Lender and its counsel, Lender’s approval of
the initial Development Plan and to other conditions customary for financings
of this nature, appropriate in context of the proposed transaction or requested
by Lender.
The Credit Facility amount shall be limited to a Borrowing Base with the
initial Borrowing Base set at $2,500,000 committed at Closing. Funding will be
available a pro-rata basis subject to issuance of the Warrants as follows;
-
Tranche A: $2,000,000
upon the issuance of 45,000,000 Warrants;
-
Tranche B: $500,000
upon the issuance of 13,775,000 Warrants;
-
Tranche C: Up to
$47,500,000 upon the issuance of 39,500,000 Warrants at first drawdown under
this tranche and at Macquarie Bank’s sole discretion.
The Strike Price of the Warrants shall be equal to
1.25 times the volume weighted average price (“VWAP”) over a
sixty-day trading period preceding the public announcement associated with the
Loan Facilities and the Term shall be Four years from the date of issue.
For further
information contact:
For more information visit www.grandgulfenergy.com and sign up for email news.
***
Issued by
Purple Communications
Level 3, 28 Kings Park
Road, WEST PERTH
WA 6005
Ph: 08 9485 1254 Fax: 08 6263 0455
purple@purplecom.com.au