Octanex, Peak sign amended loan agreement

By Romel S. Gurky

ASX-listed Octanex N.L. said that it has entered into an amended and restated loan agreement and associated security documentation with ASX-listed Peak Oil & Gas Limited and with Peak?s wholly owned subsidiary Peak Oil & Gas (Australia) Pty Ltd (POGA).

In May 2014, Octanex and Peak entered into a loan facility agreement with associated security documentation, pursuant to which Octanex funded Peak?s budgeted outgoings until the end of 2014. This was part of a planned scheme to merge Peak into Octanex.

?These outgoings were substantially to fund Peak?s share of seismic acquisition activities in the South Block A Production Sharing Contract in North Sumatra, Indonesia,? Octanex said in a statement Friday.

Peak holds an effective 38.25 percent interest in the South Block A (SBA) PSC, which is operated by Renco Elang Energy Pte Ltd (REE), a company controlled by Peak, with a 51 percent interest. Other Peak?s partners in SBA are KRX Energy Pte Ltd (KRX) and PT Prosys Oil & Gas.

In December 2014, following a decision by Octanex not to extend the end date for the implementation of the proposed schemes of arrangement (schemes) for the merger of Peak into Octanex, Peak terminated the proposed schemes.

On December 31, 2014 Octanex agreed to reschedule Peak?s debt due to Octanex of approximately A$1.95 million. As a first step in that process, Octanex agreed to extend the due date for repayment of the debt until March 1, 2015 in order for detailed agreements to be entered into.

Such detailed agreements have now been entered into and key principles are summarized below.
a) Peak Group?s (Peak and POGA) indebtedness to Octanex is fixed as at December 31, 2014 at $1,953,815 which, from January 1, 2015, will bear interest at the RBA cash rate from time to time. Unpaid interest will be capitalised.
b) The revised terms provide for extensions of the due date for payment of Peak Group?s debt to Octanex on a recurring 60 day cycle with possible extensions on a rolling basis for a maximum of 18 months from December 31, 2014 to June 30, 2016, subject to Octanex not terminating the arrangement at any time during a 60 day period.
c) During each 60 day extension period Peak Group and Octanex will consult as to steps being taken or available to Peak Group to repay its indebtedness to Octanex.
d) Peak and POGA have assumed joint and several liability to repay all such moneys which were advanced by Octanex to Peak Group and which were used substantially by POGA to fund its obligations in relation to South Block A in Indonesia as previously advised to the market.
e) The loan documentation has been revised with an amended and restated loan agreement being entered into and both Peak and POGA have, pursuant to a further ASX waiver granted on February 27, 2015, granted charges over their assets to secure repayment of the Peak Group?s indebtedness in due course.

Editing by Reiner Simanjuntak