Guyana partners strike loan deal

Nov. 4 (offshore-energy.biz) CGX, a Canadian-based oil and gas exploration company focused on oil exploration in the Guyana-Suriname Basin, has entered into a loan agreement with a subsidiary of Frontera Energy Corporation, its joint venture partner in a petroleum prospecting license for a block offshore Guyana.

Thanks to a senior secured loan facility secured with its partner in Guyana’s Corentyne block, CGX will continue to finance its share of costs related to the corporate working capital costs and other budgeted ones.

The $2.5 million loan will be available for drawdown in tranches on a non-revolving basis for a period of six months, beginning upon the completion of the conditions precedent to the first tranche drawdown.

During the drawdown period, CGX may request drawdowns provided that the maximum amount of any tranche drawdown does not exceed $1.9 million and that the aggregate amount of all does not surpass $2.5 million.

The loan, together with all interest accrued, is set to be due and payable a year after the date it was arranged, with interest payable on the principal amount outstanding accruing at a rate of 19.32% per annum, compounding on a monthly basis.

The arrangement remains subject to customary conditions, including the Canadian player obtaining regulatory approvals. This loan comes months after Frontera and CGX urged the Guyanese government to work out the issues surrounding the Corentyne block license.

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