Niko Resources secures US$60m loan

By Ruli Setiawan

Canadian oil and gas firm Niko Resources Ltd. has secured a syndicated loan of US$60 million from a group of institutional investors.

The loan will bear interest at 7 percent per annum, payable quarterly, and will mature on July 17, 2015 with no scheduled amortization.

The company said in a press statement on Friday that it has the right to prepay the loan after one year without penalty. The loan will be guaranteed on an unsecured basis by the company's subsidiaries that directly or indirectly own the company's interests in the D6 Block in India and will be secured by pledges of the shares of the company's subsidiaries that own the company's interests in the NEC-25 Block in India and two blocks in Indonesia.

Niko estimates the net proceeds from the loan will be approximately US$52.5 million, after deducting the original issue discount and the estimated related expenses payable by Niko.

Under the terms of the loan, the net proceeds can be used for funding of working capital requirements, with draw downs to occur in separate tranches on or before July 31, 2013.

In connection with the loan agreement, the company has also signed exploration option agreements granting farm-in options in two Indonesian blocks to the investors' nominee.

Niko Resources owns stakes in various oil and gas assets in Indonesia including the Lhokseumawe PSC (30 percent), Sunda Strait I PSC (100 percent), West Sageri PSC (100 percent), SE Ganal PSC (100 percent), Bone Bay PSC (45 percent), Cendrawasih PSC (45 percent), Cendrawasih Bay II PSC (50 percent), Cendrawasih Bay III PSC (50 percent), Halmahera-Kofiau PSC (80 percent), Halmahera II PSC (20 percent), East Bula PSC (50 percent), SE Seram PSC (100 percent), West Papua IV PSC (80 percent), South Matindok PSC (100 percent) and North Makassar PSC (50 percent).

Editing by Benget Besalicto ST