Atlantic Petroleum signs an £8 million Secured Convertible Loan Facility

Atlantic Petroleum (“AP”) (NASDAQ Copenhagen: ATLA DKK and Oslo Stock Exchange: ATLA NOK), announced that further to its announcement of 24 March 2016, it has entered into a loan agreement (the “Loan Agreement”) with London Oil and Gas Limited (“LOG”) for the provision of a secured convertible loan facility for up to £8 million (the “Facility”).

    Highlights

A £8 million secured fully convertible loan facility to be made available by LOG, subject to certain conditions precedent, providing AP with additional working capital and funding for future acquisitions primarily targeted in Eastern Europe and the Eurasia region.
​Up to £3 million of the New Facility to be used to fund corporate G&A and fees up to May 2019.
Up to £6 million (provided that the total doesn’t exceed £8 million) of the New Facility to be dedicated to fund acquisitions that would add value to the existing AP portfolio.
Loans drawn down pursuant to the Facility will carry a coupon of 9%, with accrued interest capitalised monthly and convertible with the principal loan.
The Facility will be secured against certain assets.
Loans drawn down and accrued interest will be fully convertible at any time following the drawdown of each tranche at LOG’s election into ordinary shares of DKK 1 each in the capital of the Company (“Ordinary Shares”) at a conversion price of DKK 15 per Ordinary Share (the “Conversion Price”).
To the extent that the Facility has not been drawn in full at the end of the availability period, being 24 May 2019, LOG may require AP to draw down the balance of the Facility provided that LOG undertakes to immediately convert such amount into Ordinary Shares at the Conversion Price, bringing the Loan Agreement to an end
​As part of the agreement LOG have the right to nominate a Board member and will propose a non-executive Director, to be announced in the near future, and AP will shortly thereafter call a general meeting to that effect.
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In addition to the strengthening of the board, an advisor to LOG, to be announced in the near future, will join as a special adviser to the AP board.
Clint Redman also joins AP in a part time role as Head of Corporate Finance. He is currently Head of Corporate Finance with LOG and with UK based Independent Oil and Gas.
Clint has worked in the investment banking industry for 35 years covering a wide range of markets from equities through to financial futures. Clint has worked across the globe from Tokyo to New York for some of the world’s largest investment banks which include Goldman Sachs, Oppenheimer, Drexel Burnham and Lehman Brothers and brings a wealth of knowledge and contacts.

    Ben Arabo, CEO of Atlantic Petroleum, said:

“We are delighted to announce the loan agreement with London Oil and Gas. The agreement secures funding for P/F Atlantic Petroleum and enables the company to start building a new asset portfolio. In the past year we have been focussed on our liquidity and securing as much value as possible from our North Sea portfolio and been limiting our exposure to new and existing liabilities, and that work is still ongoing.
For future opportunities Atlantic Petroleum will be looking beyond the North Sea. The new focus area will be Eastern Europe and the Eurasian region. In that context we are very pleased to be able to strengthen the Board of Directors with relevant experience. A number of the London Oil and Gas Directors have significant experience in the Eurasian Union.
I am also very pleased with the addition of key Corporate Finance resources to the management team to help finance future projects. The current market situation is an opportune moment for Atlantic Petroleum to capture opportunities in the new focus area and the plan is to move quickly and secure assets and opportunities over the coming months.”

    Simon Hume-Kendall, Chairman of London Oil and Gas said:

“We have developed an excellent relationship with Atlantic Petroleum over the last six months and we are very pleased to support them in their future plans to develop some of the major opportunities in the Eurasian Union in this moment of the oil and gas cycle.”
Source: Atlantic Petroleum
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