Financing is to fund the restructure of the Grieve CO2 Enhanced Oil Recovery (EOR) Project in the U.S.
Securing financing is an integral step to finalising the restructure, with joint venture (JV) partner Denbury Resources, and getting the project operational.
To accommodate finalisation of key outstanding agreements in relation to the Grieve JV restructure, Elk and Denbury have executed a further extension agreement with a revised deadline of 7 July 2016.
Loan financing is targeted to close in the second half of July 2016.
Benefit Street Partners
Benefit Street Partners and affiliates manage over US$11 billion in assets across a broad range of credit strategies, and is the credit arm of Providence Equity, a global asset management firm with US$45 billion in assets under management.
Closing of the proposed senior debt facility is subject to definitive legal documentation and certain other conditions precedent, and is targeted for the second half of July 2016.
Restructuring the Grieve Project
Elk currently holds a 35% working interest in the Grieve Project located in the U.S. state of Wyoming.
Denbury is the operator of the project and holds the remaining 65% interest.
Field pressure surveys have proven the project's oil production method of injecting water and CO2 to achieve the required pressure for oil production.
Elk is to fund a capped US$55 million fixed project development cost.
An initial US$1.5 million progress payment has been made with the remaining $53.5 million expected to be funded by a combination of debt and equity.
Elk launched a $A30.7 million equity raising in June and is currently finalising a US$58 million debt facility with Benefit Street Partners.
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