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Company Announcements

$60m Credit Facilities & Board/Management Changes

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By LSE RNS

RNS Number : 0180B
Andes Energia PLC
30 March 2017
 

          30 March 2017

 

Andes Energia plc

("Andes" or "the Company")

 

US$60,000,000 credit facilities and Board and Senior Management Changes

 

The Company is pleased to announce two new credit facilities totaling US$60,000,000 with Mercuria Energy Trading S.A. ("Mercuria") and changes to the senior management team.

 

Highlights

·    US$20,000,000 debt facility from Mercuria to finance drilling activities in Chachahuen and other working capital requirememts

·    US$40,000,000 credit facility from Mercuria to finance drilling activities across the Andes portfolio encompassing the Company's highly valuable Vaca Muerta acreage

·    Appointment of Mr Anuj Sharma as non board level Chief Executive Officer with immediate effect, replacing Alejandro Jotayan

·    Nicolas Mallo Huergo, to assume the role of Executive Chairman, on an interim basis

 

Credit facilities

 

The Company has entered into two credit facilities with Mercuria.

 

A US$20,000,000 debt facility which shall be used to finance (i) the drilling activities in Chachahuen, the Company´s producing field in partnership with YPF, and (ii) finance other working capital requirements of the Andes group. This facility carries interest at a rate of US$ LIBOR plus a margin of 12.5%. Interest is payable monthly with effect from 31 May 2017 and the principal is repayable in 6 monthly installments from 31 July 2017. The loan maturity date is 31 December 2017. The loan is secured by way of a charge over shares representing 45% of the issued share capital of Kilwer S.A. and Ketsal S.A.   Kilwer S.A. and Ketsal S.A. are wholly owned subsidiaries of the Company and hold the interest in the Chachahuen licence.

 

A further US$40,000,000 credit facility shall be used to finance other drilling activities of the Company, encompassing activity on the Vaca Muerta, where the Company has 250,000 net acres. This facility is available until 31 December 2018 with a maturity date of 31 December 2019 and termed out date (see below) of 31 December 2020 and carries interest at a rate of US$ LIBOR plus a margin of 9% until the maturity date and a margin of 11% after the maturity date until the termed out date and is payable monthly. Principal repayments will be funded from each project cash flow subject to a maximum of 18 equal monthly installments after a grace period of 9 months from the date of drawdown for each project. Principal for each draw down is to be repaid by the maturity date with the option to extend to the termed out date in which case the maximum number of installments shall be increased by 12. Once the principal for a project has been repaid the lender shall receive 60% of a project's cash flow until it has received an internal rate of return of 15% on the actual amount funded under the facility on each specific project. This shall be increased to 17% if the Company extends the maturity date to the termed out date. The loan is secured over the cash flows generated from a project and the economic interest in the project.

 

Mercuria holds a 8.16% interest in the issued share capital of the Company.

 

Changes to Senior Management

 

The Company is pleased to announce the appointment of Mr Anuj Sharma as non board level Chief Executive Officer with immediate effect.

 

Anuj Sharma, Chief Executive Officer, has 20 years of experience in the oil and gas industry and most recently headed Mercuria Energy Group's investments in Argentina. As the head of Mercuria's Argentine subsidiaries, he led Petrolera El Trebol S.A., Mercuria Group's upstream oil and gas company in Argentina, to significant exploration and development success, which resulted in more than a doubling of the firm's production and reserves.  Prior to that, he was the Vice President and Director, originating investment opportunities for a multi-billion dollar family office in Houston, USA. Anuj also held positions in upstream equity research, and portfolio management for a large commodity investment firm, making principal investments in the upstream oil and gas sector and managing the firm's unconventional shale portfolio in the US.  He started his oil and gas career as an engineer for Schlumberger Oil Field Services.  Anuj received his Bachelor of Electrical Engineering in India and MBA from Duke University, USA where he graduated with the highest honors as a Fuqua Scholar. Anuj in the short term will continue in his role at Mercuria as investment manager for Mercuria Energy Group's investments in Argentina to facilitate a smooth transition.

 

Alejandro Jotayan, presently Chief Executive Officer, has agreed to step down from the Chief Executive Officer position and the Board, with immediate effect.

 

As the appointment of the new CEO is a non board position, Nicolas Mallo Huergo, currently Non-executive Chairman, will, with immediate effect, assume the role of Executive Chairman on an interim basis.

 

Nicolas Mallo Huergo, Executive Chairman, commented: "We are very pleased with these credit facilities that will allow us to capitalise on the positive business environment in Argentina and the progress as to the oil agreement reached by the Argentine government, the government of the province of Neuquen, the Industry and the Trade Unions. 2017 and 2018 will be significant years for the development of our portfolio in Argentina. These credit facilities reflect our growing relationship with Mercuria. We welcome Anuj who brings a wealth of knowledge and experience in South American oil exploration and production. I would like to also take this opportunity to thank Alejandro for his contribution to the Company during his tenure.".

 

Anuj Sharma, Chief Executive Officer, commented: "I am honoured to be given the opportunity to be working with Andes Energia as its CEO into the next phase of its development.  I am looking forward to working with the Andes team members that have contributed to its success thus far and alongside our investors, expanding the Company's operations in developing its conventional and vast Vaca Muerta unconventional resources to create a best-in-class independent E&P company."

 

 

 

For further information, please contact:

 

 

Andes Energia plc

 

Nicolas Mallo Huergo, Chairman

Billy Clegg, Head of Communications

 

 

T: +54 11 5530 9920

 

 

Stockdale Securities

Antonio Bossi

David Coaten

 

T: +44 20 7601 6100

Panmure Gordon

Adam James

T: +44 207 886 2500

 

Atholl Tweedie

 

 

Tom Salvesen

 

 

 

 

Camarco

Gordon Poole

 

T: +44 20 3757 4980

Note to Editors:

Andes Energia plc is an oil and gas exploration and production company focused on onshore assets in South America with a market capitalisation of circa £220m. The Company has its main operations in Argentina and Colombia.

 

The Company has approximately 25* MMbbls of conventional 2P reserves, and it also has certified prospective resources of 640 MMboe, primarily in the Vaca Muerta unconventional development in Argentina and over 7.5 million acres across South America.

 

The Company has approximately 250,000 net acres in the Vaca Muerta formation, which is the second largest shale oil deposit in the world and the only producing shale oil deposit outside of North America, currently producing 45,000 boepd. Over 300 wells have already been drilled and fracked in the Vaca Muerta formation.

 

Andes is the only AIM quoted company on the London Stock Exchange with exposure to the Vaca Muerta shale.

 

*Includes 100% of Interoil's net reserves and production in which Andes has a 26.02% interest


This information is provided by RNS
The company news service from the London Stock Exchange
 
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