JOHANNESBURG (miningweekly.com) – SacOil has entered into a settlement agreement with Energy Equity Resources Norway (EERN) relating to outstanding loan amounts owed by EERN and its subsidiaries to the oil and gas explorer.
The EERN loans originated from the joint participation in oil prospecting licence (OPL) 233, in Nigeria, whereby SacOil advanced funds on behalf of EERN to secure the participation interest in the licence.
In October 2011, SacOil advanced $5-million in loans to EERN to fund the obligation of its subsidiary EER 233 Nigeria (EER 233) to pay a performance bond in respect of OPL 233.
The loans carried an interest rate of between 25% and 32% a year with payment due in various instalments and were secured in SacOil’s favour against EER 233's equity, effectively giving the company security over EER 233’s 20% interest in OPL 233.
“The EERN group has, to date, been unable to settle the amount outstanding under the loans, which amounts to around $24.2-million,” SacOil said in a statement.
Further, pursuant to a farm-out agreement executed between SacOil, EER 281 and TransCorp in relation to OPL 281, the company advanced funds on behalf of the EERN group to secure the farm-in into OPL 281.
“This settlement reflects the restructuring of the loans advanced to the EERN group and the consequences of our termination of the OPL 281 contract with TransCorp.
“It also brings an end to the master joint venture agreement with EERN with regard to the joint investigation of new exploration opportunities. This is in line with our renewed focus on development and production assets,” SacOil CEO Dr Thabo Kgogo advised on Thursday.