Angus Energy PLC has announced the signing of definitive loan documentation with Trafigura Group PTE Ltd for a £20 million loan facility. The funds will be used to repay existing debts, invest in wells and equipment to increase gas production from Saltfleetby, and restart oil production from the Brockham Field in Southern England. The new facility carries a five-year amortizing term with a one-year grace period for capital repayment and a cash sweep for accelerated repayment. The interest margin over 3-month term SONIA is 8%, compared to 12% on the existing senior debt and 15% on the bridge facility.
The existing senior debt of £4.56 million will be transferred to Trafigura, and the proceeds of the Facility will be applied to repay the bridge facility of £6 million, and £1.75 million of Forum Energy's deferred consideration from the sale of Saltfleetby Energy Limited's 49% interest in the Saltfleetby Field to Angus in 2022. The balance of funds from the Facility will be used to pay legacy creditors and invest in wells and equipment to increase gas production from Saltfleetby and restart oil production from the Brockham Field.
Trafigura will act as offtaker of the sales gas produced at the Saltfleetby Field for a 5-year period on terms in line with Angus's existing offtake agreements. The existing hedge contract will be replaced with a gas offtake, with embedded price protection, at an average price, to be agreed, for the period to July 2025. With the refinancing in place and the strengthened balance sheet, Angus is entering its growth phase to acquire additional production and develop storage opportunities.
The principal terms of the Facility are for a 5-year loan, with a twelve-month grace period on principal repayment and then approximately even amortization from March 2025, carrying a margin of 8% over 3-month term SONIA. Covenants are tested semi-annually, and the existing security package encompassing first fixed and floating charges over all the Group's leases, licenses, and equipment has been novated to Trafigura. In conjunction with the signing of the Facility, the Company and Trafigura have agreed an MOU regarding the potential for gas storage opportunities at Saltfleetby.
The Facility will be used to pay down historic debt, and after debt repayment and payment of associated interest costs, fees, and expenses associated with the refinancing, there will be a remaining balance of approximately £5.9 million. This will be utilized to stabilize the Company's creditor position and provide the short and medium-term capex needs to advance key programs at Saltfleetby and Brockham Fields, including the preparations for the drilling of a new well or side track at Saltfleetby in 2025.