The Nigerian Federal Ministry of Petroleum Resources (FMPR) has agreed to grant the Ororo field partners a three-year extension to the Ororo field license (OML 95), offshore Nigeria, with effect from May 1, 2016.
The partners in the license are Sirius Petroleum, Guarantee Petroleum Company, and Owena Oil & Gas.
According to Sirius Petroleum, an investment company focused on oil and gas exploration and development opportunities in Nigeria, the renewal of the license is conditional on the payment of a Renewal Fee of $500,000 by no later than July 29, 2016.
The field lies in shallow waters offshore Ondo State in water depths ranging between 23ft and 27 ft and it is adjacent to Mina, West Isan, Ewan, Eko and Parabe fields – all of which are operated by Chevron.
Negotiations have now been concluded between the partners and the FMPR and as a result, Sirius will pay the renewal fee which is recoverable under the FTSA Agreement entered into between the company, Guarantee and Owena Oil & Gas announced on October 10, 2011.
As with all other costs incurred under the FTSA, the license fee is cost recoverable from oil production.
Sirius in fundraising
Sirius also informed the company has received firm commitments from existing shareholders to raise aggregate funds of £500,000 ($640,000) before expenses (approximately £442,000 ($570,000) after expenses) to the issue of 200,000,000 new ordinary shares at an issue price of 0.25 per share. The funds being raised are being utilized specifically to pay the renewal fee and to progress the work on the Ororo field.
Pursuant to the placing it is expected that an application will be made for the admission of the placing shares to be trading on AIM (Admission). Settlement and Admission are expected to occur on or around July 20, 2016.
Funds raised for the renewal fee are in addition to the working capital requirement. The directors will seek shareholder approval at the company’s Annual General Meeting (AGM) to obtain the relevant share authorities in relation to future working capital and project funding requirements.
The board has received a proposal from a service provider for project funding but are comparing this to several competing vendor finance opportunities in order to secure the most optimal deal.