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Northcote Energy Issues GBP300,000 Loan Notes To Fund Zink Ranch Drilling

July 10, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Northcote Energy Ltd Thursday said it has issued the remaining GBP300,000 zero coupon secured convertible loan notes, so it can fund and accelerate its drilling programme at Zink Ranch in Oklahoma.

The onshore US oil and gas exploration and production company said it needs to make infrastructure improvements at Zink Ranch in order to deal with the current and anticipated increases in gas and fluid flows resulting from the 2014 drilling programme.

"The infrastructure and well equipment upgrades currently being undertaken will remove the current bottlenecks and allow for full production and efficiency at all of our wells, including the four recompleted recently," said Chief Executive Randy Connally in a statement.

The company said it has submitted permits for four new drill well locations at Zink Ranch, and hopes to spud the first well in July.

Northcote Energy said the second phase of the 2014 programme will start in the third quarter and will include the remaining 10 wells to be re-completed at Zink Ranch during the remainder of the 2014 work programme. It said phase two will be completed by September or October, and will hopefully increase production beyond its 250 barrels of oil equivalent per day target.

"This target is certainly deliverable in the short term, and all the work required to enable us to hit this target will be completed in July or early August," said Connally.

The company said it is funding the acceleration of the drilling programme at Zink Ranch, by the issue of GBP300,000 convertible loan notes to Darwin Strategic Ltd.

"Northcote has committed to use the anticipated cash flows from the new production to accelerate their repayment," the company said.

Northcote Energy shares were down 7.2% at 0.720 pence Thursday morning.

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Source: Alliance News

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