“We are very pleased to continue and extend our relationship with the EBRD through this new loan facility. Prior to the changes in the Ukraine fiscal regime since the last half of 2014, and in particular the restrictions on foreign currency remittances from Ukraine, Serinus had been fully capable of funding the Romanian program through cash flow. Those changes, along with the recent drop in commodity prices significantly impaired that ability,” Tim Elliott, President and Chief Executive Officer of Serinus said.
The loan will be repaid in 10 semi-annual installments and the interest rate will be equal to LIBOR (six month) plus 8%.
Satu Mare is a 2,949 square kilometers exploration block which is 60% owned and operated by Winstar Satu Mare SRL, a wholly owned subsidiary of Serinus, while KMG International (former Rompetrol) owns the remaining 40%.
The EBRD funds will be used for financing the investment program in Satu mare, which include drilling, completion and testing the Moftinu-1001 and 1002bis wells, and the 3D seismic survey conducted in Santau, Satu Mare, in the last quarter of 2014.
The funds will also be used for Phase 2 work requirements associated with the Satu Mare license, Serinus said.
According to an agreement between Winstar Satu Mare and KMP International, Serinus pledged to fund 100% of these expenditures, and after the Phase 2 work requirements have been completed, all working interest owners will be responsible for their respective shares of future capital costs.