Erin Energy Corporation has agreed to heads of terms on a commercial agreement with an embedded prepayment element with Glencore Energy UK Ltd, a subsidiary of Glencore PLC.
The offtake contract would allow Glencore to undertake the lifting of Oyo crude from the FPSO Armada Perdana for a minimum term of two years. The embedded prepayment element, which is subject to completion of legal documentation and certain conditions precedent, would provide proceeds in two tranches beginning with the completion of the Company's Oyo-7 well. The initial tranche would be available in two equal drawdowns totalling up to $50 million, and would depend on Erin Energy's ability to meet certain production targets. The second tranche would be an inventory revolving facility of up to $100 million.
Kase Lawal, Chairman and CEO of Erin Energy commented, 'We are pleased to be working with Glencore as our commercial partner to further our development work offshore Nigeria. This prepayment facility would provide us with additional working capital and is a strong endorsement of our offshore Nigeria assets.'