Independent Resources Egypt Ltd (IRE), an Egyptian joint venture between the two british firms Nostra Terra Oil and Gas Company and Independent Resources Plc , agreed to pay $200,000 to TransGlobe Petroleum International as a full and final settlement of a US$2.5mln loan note, reported Interactive Investor. Nostra Terra will pay $100,000 for its proportional share of the agreement.
The loan was part of the arrangement put in place when IRE agreed to acquire the non-operated stake in the Egyptian East Ghazalat concession in October 2015. The amount was reported at $3.5m, divided into $1m of cash and a $2.5m loan note issued to TransGlobe, according to Proactive Investors.
Due to the early settlement, TransGlobe has agreed to forge the remaining $2.3m, and in return IRE will release TransGlobe from any potential warranty and indemnity claims that may arise from TransGlobe’s prior ownership of East Ghazalat.
Furthermore, the early settlement has improved IRE’s purchasing cost to $1.19/b, down from $3.47, while the company’s 50% stake in the concessions has not been affected and remains just over 1mb of gross proved and probable oil reserves. Furthermore, Nostra Terra’s portion of the loan has extinguished the liability, leaving no additional debt on the asset.