Press Release

Lime Petroleum’s US$60 million senior secured bond issue completed

OSLO, 9 July 2021 – Lime Petroleum AS (“Lime Petroleum”) is pleased to announce that the issuance of its 2.5-year senior secured bond of NOK 500 million (approximately US$60 million) (the “Bonds”) has been completed, the settlement date being 9 July 2021.

The use of proceeds of the Bonds is to partly finance Lime Petroleum’s acquisition of the Wintershall DEA Norge AS-operated Brage field from Repsol Norge AS, refinance an existing exploration financing facility and for general corporate purposes.

The Bonds attracted a lot of interest in the market and were oversubscribed by more than 100 per cent. The books were closed within three days after promotion to prospective investors was kicked off by financial adviser ABG Sundal Collier ASA.  The issuance of the Bonds is a condition precedent for Lime Petroleum’s acquisition of the Brage Field in Norway. Placement of the bond was possible due to the Brage Field’s production profile, cash flow generation and quality in the security package of the bond provided.

The bond is secured with, inter alia, a pledge over Rex International Investments Pte. Ltd.’s shareholding interests in Lime Petroleum, security with first priority over interests in future hydrocarbon assets which Lime Petroleum and/or its subsidiaries may acquire in future, tax balances held by Lime Petroleum today and deferred tax assets related to the Brage Field upon completion of the Acquisition. Lime Petroleum’s deferred tax assets and tax refund receivables will total NOK 644 million (approximately US$77 million) as at 1 January 2021 (“Tax Assets”), upon completion of the Acquisition. In the event of a default on the bond, any remaining Tax Assets are backed by the Norwegian Government and can be used by bond holders to partially recoup any shortfall in the bond issue.

The maturity date of the Bonds is 9 January 2024. The coupon rate will be 3 months NIBOR* plus 8.25 per cent. The Bonds are targeted to be listed on the Oslo Børs within 6 months.

It is to be noted that there will be a deduction of 22 per cent in corporate tax deduction allowance in the effective interest rate for the Bond. There will also be further deduction allowance under the special petroleum tax based on a certain formula to be reviewed at the year-end.

Lime Petroleum had on 15 June 2021, entered into a conditional sale and purchase agreement to acquire 33.8434 per cent interests in the oil, gas and natural gas liquids (NGL) producing Brage Field, and the five licences on the Norwegian Continental Shelf over which the Brage field straddles, for a post-tax consideration of US$42.6 million.  The transaction is pending approval from the Norwegian authorities and is expected to be completed in the fourth quarter of 2021.