Business
Joint Venture with Oil and Gas Management Servi...
Joint Venture with Oil and Gas Management Servi....
About this update from Cadogan Energy Solutions Plc
[{"type":"text","content":"\n \n18 June 2013\n\n Cadogan Petroleum plc (\"Cadogan\" or \"the Group\") \n\n Cadogan Announces Joint Venture with Oil and Gas Management Services Group \n \n\nCadogan is pleased to announce that it has today signed a non-binding\nMemorandum of Understanding (\"MoU\") and a Secured Loan Agreement (the \"Loan\")\nwith Oil and Gas Management Services Limited (\"OAGSG\") (www.oagsg.com).\n\nOAGSG, which operates the largest Oil Country Tubular Goods (OCTG) business in\nKurdistan and runs a complete mill to well service, has been operating\nsuccessfully since 2008. It provides services to a blue-chip client list, which\nincludes Tenaris, Chevron, Exxon and other major operators. It also provides\nmanagement and consultancy services in the region.\n\nPursuant to the MoU OAGSG will assist Cadogan in developing a presence in the\nKurdistan region, while the parties will apply their respective resources to\ndeveloping their existing services businesses in Ukraine and Kurdistan. The\nparties will commence negotiating formal, binding terms which will include\ngranting Cadogan an option to purchase up to 51% of the share capital of OAGSG\nwithin 18 months at a fair market value, to be determined by the parties at the\nrelevant time. Cadogan will make a further announcement as and when binding\nterms have been executed. \n\nIn conjunction with the MoU Cadogan has agreed to lend OAGSG up to US$3m on a\nfully secured basis against receivables due to OAGSG, subject to a maximum Loan\nto Value of 75%. The term of the Loan is 24 months and interest is 15% p.a.,\npayable on drawdown. The funds will be used to enable OAGSG to expand its\nexisting operations in Kurdistan, purchase new equipment and further capitalise\non growth in the industry in the region. The Loan contains standard events of\ndefault. Amounts loaned will be repaid as funds are received by OAGSG on the\ndue receivables and to the extent any amounts still remain outstanding, repaid\nin full after 24 months.\n\nBertrand des Pallieres, CEO of Cadogan, commented: \"Cadogan has already seen\npositive returns from its limited investment in resources in oilfield services\nin Ukraine. For some time now we have been assessing options for accelerating\ngrowth in this developing business area whilst at the same time seeking to\nexpand our global presence through the targeted use of funds....