Union Jack Oil plc has agreed a £1 million secured term loan facility from Egdon Resources UK Ltd, operator of the Wressle joint venture oil field in North Lincolnshire.
CONDITIONS
Union Jack will use the funds as additional working capital for general corporate purposes.
The company holds 40% of Wressle, which lies within PEDLs 180 and 182.
Egdon, which is owned by Heyco Energy Group, and Europa Oil & Gas (Holdings) plc each own 30%.
The 24-month loan, from drawdown, carries terms and restrictions including security over Union Jack’s interest in the two licences and a 5% annual interest.
Union Jack must each month pay 60% of operating free cash flow generated from Wressle, and is allowed to keep the remaining 40%.
The company is additionally not allowed to pay dividends, distributions or returns of capital without Egdon’s approval.
Egdon also has first right of refusal if Union Jack wants to sell any of its interest in PEDLs 180 and 182 or the joint operating agreements covering Wressle.
Until final repayment of the loan, Union Jack must support Egdon’s role as the operator of Wressle.