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Friday, 24 May 2013
Caza Oil & Gas nets vital funding for ‘significant’ Bone Springs opportunity
Caza Oil & Gas (LON:CAZA, TSE:CAZ)) has secured vital debt funding to pay for a major phase of work over the next two years.
Apollo Investment Management has agreed to buy up to US$50mln of senior secured notes, with the first US$20mln being paid up front.
A further US$30mln may be drawn at Caza’s discretion over the next 15 months.
With the injection of cash Caza can now pursue an accelerated programme to develop the Bone Springs play in New Mexico, United States.
Initially it will drill as many as 12 new wells over the next 12 months.
Caza says this is a significant opportunity to deliver increased production, revenue growth and shareholder returns.
"We are extremely pleased to announce this financing facility with Apollo,” said chief executive Michael Ford.
“We made significant progress in 2012, laying the groundwork for continued success in the Bone Spring play in Lea and Eddy Counties, New Mexico. However, in order to efficiently and properly advance the company's prospects and properties in the play, additional financing of proper size and scope was needed."
He adds: “Management will begin utilizing funds for the drilling programme immediately.
“The first six projects to be funded include: the Lennox test well, which is currently being completed; a second Caza Ridge well at Copperline; a test well at Gateway; a test well at West Copperline; a test well at Roja, which is currently drilling; and a test well at Madera.”