Deckler Resources will provide Shell Western Supply and Trading Limited, Shell’s crude oil and petroleum products subsidiary, with a US$20 million debt financing facility from Shell for the continued development of Nigeria’s Oza field. confirmed the closure of
Dekler and its joint venture, Millennium Oil and Gas Company Limited, also announced the execution of a debt financing facility with Shell for the development of oilfields with a five-year term.
Upon satisfaction of certain outstanding conditions preceding the withdrawal of the Development Debt, the Development Debt will be paid in three tranches based on development drilling activity at the Oza field.
Proceeds from the development debt will be used to fund Oza field development activities, including re-entry of existing wells, drilling of new wells and related infrastructure.
The new development well is expected to be dual zoned with two oil production zones simultaneously using two separate tubing strings. A full field development plan for the Oza field is expected to include the drilling of eight or nine new wells and the re-entry of two existing wells. As previously announced, the Millennium Past Debt has been restructured on similar terms to the Development Debt.
In accordance with the requirements of the development debt, Decklar entered into a facility agreement and an offtake agreement with Shell. The Development Obligations Facility Agreement contains a hedging program that allows for a put option hedging structure to manage exposure to oil price fluctuations. Managed by Shell/Decklar/Millenium.
As recently announced, the Oza-1 well will be returned to production once the evacuation begins.
Decklar Resources CEO Sanmi Famuyide said: Shell’s participation in debt financing reflects the validation of Deckler’s plans for the full development of the Oza field. ”
