Transeuro Energy Corp. (CVE:TSU) says that partner Aleator Energy (ASX:AWD) has secured funding of $20 million to support the drilling obligations under a farm in deal between the two parties on the Povorotnoye gas field in Crimea, Ukraine.
Transeuro has retained a 10.8 percent interest in the joint activity agreement to develop the gas field. Under the terms of the farm-in deal, the company will receive US$500,000 upon spudding of the POV 105 well.
Aleator signed a binding term sheet for the US$20 million with financier Gres holding Ltd earlier this week. Under the agreement, the facilitator will provide a cash backed bank guarantee from a "AA rated" major bank to secure the loan funds.
Aside from being used for the POV 105 well, the funds will also be allocated for the provision of a pipeline and plant to process and delivery anticipated gas and condensate when the well is completed and prepared for production, according to Aleator's statement.
Final agreements are currently being prepared, subject to a number of conditions, and are planned to be signed in April with the funds available roughly 20 days later.
Meanwhile, Aleator has arranged funding to consolidate infrastructure in Ukraine, such as warehouse and administrative facilities, in preparation for the drilling of the POV-105 well. Construction of the access road, drill pad, and cellar has been completed, the company said, and work has also continued in taking delivery into Aleator's warehouse of long lead items.
Earlier this week, Transeuro confirmed its first draw down on its funding arrangement with Yorkville Advisors' Global Master fund. The facility was arranged in February and Transeuro confirmed that it is initially issuing 7mln new shares to Yorkville at a price of 5 Canadian cents each. In total it will raise around C$350,000 (NOK 2mln) from this first draw down.
It is expected that further shares will be issued by Transeuro to raise more of this available capital on an 'as needed' basis. The company says this will support development of its existing assets and implement its strategic plan.
Transeuro Energy is a junior oil and gas exploration and development company with properties in Canada and in Ukraine.
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