Canadian firm seeks $17.5mn for Turkish gas drilling
Canadian junior Trillion Energy has signed a letter of intent with a US investment fund to secure up to $17.5mn to finance further development at the South Akcakoca Sub-Basin (SASB) gas field in the Turkish Black Sea, the company said on April 27.
Trillion wants to finance new production wells at SASB, in which it has a 49% interest. The two sides will undertake due diligence with the aim of reaching definitive agreements on the support.
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The financing will involve a $4.5mn payment in exchange for overriding royalty interests of 3% at SASB and 5% at the Cendere oilfield, also in Turkey. The cap on royalty payments will be $16mn. The investor will also provide a draw-down loan of up to $13mn, repayable in instalments over 36 months.
"The combined debt and royalty financing is designed to realise the significant potential revenue stream from the SASB gas field and to minimise dilution to our existing shareholders from obtaining capital to do so," Trillion CEO Arthur Halleran said. "We are hopeful to close the financing and move forward into redevelopment this year."
SASB was one of the Black Sea's first oil and gas developments. Production started in 2007, with development costs to date totalling $608mn. Trillion is looking to extend the lifespan of the field's Phase I and Phase II wells. In June last year it reported it had increased extraction at the site by 50% to 1.517mn ft3/day, by lowering producing pressure.