Cue secures A$7mn loan to fund Aussie, Indonesian projects
Sydney-listed Cue Energy Resources has entered into a A$7mn ($4.85mn), two-year unsecured loan agreement with New Zealand Oil & Gas (NZOG) to support its existing exploration and development activities in Australia and Indonesia, the company said on June 23.
Cue has exploration and development plans at the Amadeus basin in Australia, Mahato and Sampang production assets in Indonesia over the next 12 to 24 months, to increase oil and gas production.
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“While revenue is expected to remain strong at all assets throughout this period, significant forecast expenditure, risks of cost overruns and the expected timing of expenditure has led Cue to seek short-term financing,” it said.
The loan is unsecured, with an interest rate of 10%/year fixed for the term of the loan and an establishment fee of 1.5% of the loan amount. The term of the loan is two years and early repayments are allowed with no penalty.
“Cue has a number of exciting exploration and development projects within our portfolio, which are all aimed at increasing our oil and gas production,” Cue CEO Matthew Boyall commented. “While continued strong revenue is expected from our existing production assets, we are currently drilling in the Amadeus basin, have started a 14 well programme in the Mahato PSC and expect a final investment decision on the Paus Biru gas development in the Sampang PSC, which all have significant near-term expenditure requirements.”
NZOG is a related party of Cue, holding 50.04% of the shares. As such, an independent board committee comprising of Cue independent directors reviewed and approved the terms of the loan.