News Column

Kea Petroleum To Meet Funding Obligations With New Financing Deal

May 23, 2014

Samuel Agini

LONDON (Alliance News) - Kea Petroleum PLC Friday said it has agreed a deal to issue up to GBP2.0 million of convertible loan notes to Darwin Strategic Ltd, meaning the company can meet its funding obligations under a recent farm-in agreement.

The proceeds of the issue will be used to fund Kea's NZD1.0 million commitment under phase 1 of the farm-out agreement with MEO Australia Ltd, and to meet its ongoing working capital requirements.

The deal replaces a previous convertible note facility agreed in January, under which Darwin had agreed conditionally to subscribe for GBP1.2 million of convertible loan notes.

According to Kea Petroleum, GBP800,000 of the original has been issued to date, and the obligation over the remainder is no longer in place. In addition, both parties agreed to the early expiration of the GBP5.0 million equity finance facility announced in January.

"Following the successful negotiations of the farm-in agreement with MEO Australia Ltd, announced in April 2014, regarding the Puka prospect, it was important that we moved quickly to secure the finance required to enable us to meet our initial funding obligations," Ian Gowrie-Smith, chairman, said in a statement.

"We are pleased that Darwin, with whom we have developed a successful relationship in recent months, have agreed to continue their support of the company by increasing their commitment to the company by a further GBP1.4 million, to GBP2.5 million," the chairman added.

Kea shares were Friday quoted at 2.20 pence, up 12.8%.

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Source: Alliance News

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