Niko Resources, which had engaged engaged Jefferies LLC as its financial advisor to assist the company in its sale of assets, a merger or the outright sale of the company in December 2014, has sought extension of certain milestones in its agreement with institutional lenders.
On February 12, 2015, the company announced an agreement with institutional lenders of its $340 million senior term loan facilities to amend the terms of the facilities agreement. Under the terms of the amendment, the Company agreed to achieve certain milestones related to the potential sale of the company's interest in the KG-D6 Block in India (which could include the sale of the company).
"In light of the fact that the milestone for April 30, 2015 will not be satisfied, the lenders have agreed to extend that milestone to May 31, 2015 in return for the company agreeing to offer to make a principal repayment of $10 million on the term loan by May 6, 2015," the company said in a press statement.
The company said it has closed sale of certain of its subsidiaries to a subsidiary of Ophir Energy plc for combined cash consideration of $16 million, with further payments of up to $56 million contingent on future exploration success.
The subsidiaries hold interests in four Indonesian production sharing contracts: West Papua IV, Aru, Kofiau and Halmahera-Kofiau. The cash consideration received reflects $9 million of combined net working capital obligations of the subsidiaries that have been acquired by Ophir.
Niko, however, had last month said it along with Reliance Industries Limited (RIL) and BP, contractors for KG-D6 will be working on plans to develop MJ discovery in the block, which "may lead to potentially significant additions to reserves and production levels in the coming years". It has received
an independent resources evaluation report from Deloitte LLP, an independent petroleum engineering firm.
The evaluation was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook. "The discovery and successful appraisal of MJ adds a new and exciting chapter to the D6 Block. Going forward, the contractor group in the block will be working on plans to develop MJ," William T Hornaday, Chief Operating Officer, Niko Resources Ltd had said in a statement.
Stung by lower-than-expected rise in natural gas prices, the company had in February put up for sale its stake in the block, saying there is uncertainty over the long-term price outlook in India.
Niko holds 10 per cent stake in the KG-D6 block, where a total of 20 oil & gas discoveries had been made and three out of these are in production.
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