NiMin Energy Signs Term Sheet for Long-Term Financingadmin
NiMin Energy Corp. announced the execution of a preliminary term sheet for a senior secured loan (the “Loan”) in the amount of US$36 million from a large institutional private lender (the “Lender”). At the request of the Company and subject to approval by the Lender, the Loan may be increased up to US$75 million to provide additional development capital.
The new long-term Loan will be used to repay the Company’s existing short-term debt of US$22.4 million and to fund the 2010 capital program – which is focused on developing the recently acquired Wyoming assets. The Loan is for five years, carries a fixed interest rate of 12.5% per year and is expected to close by May 31, 2010, subject to customary due diligence, negotiation of final terms, conditions and other fees and costs, and approvals by Lender and the Company’s Board of Directors.
Clancy Cottman, NiMin’s Chairman and CEO, said, “This long-term financing is an important step for the Company as it both removes the short-term debt obligation from our balance sheet and provides us with the capital to execute our 2010 drilling program – including continued drilling in Wyoming and an additional well in California. It also provides NiMin with significant financing flexibility going forward to grow our business.”
The Company recently announced the completion of its first well at the Ferguson Ranch Field in Wyoming and plans to drill an additional eleven low-risk development wells in the same field during 2010. NiMin is also planning an additional well on its California property as a result of the positive production response from the Pleito Creek “Combined Miscible Drive” operations.