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(Sharecast News) - Orcadian Energy announced the finalisation of a secured long-term loan agreement with an industry partner on Thursday.
The AIM-traded firm said its partner had agreed to lend Orcadian up to £1.15m for a period of two years.
It said the loan, as previously mentioned on 22 May, was intended to be settled from the completion payment anticipated under a proposed farm-in or joint venture arrangement involving Orcadian's recently-offered SNS licence.
The interest on the loan would accrue from the drawdown date until full repayment.
Orcadian said the interest rate, expected to be between 6% and 9%, would be determined at the time of drawdown, which was expected before 30 June.
The loan would enable Orcadian to repay an outstanding loan to Shell International Trading and Shipping Company (STASCO).
STASCO had agreed to extend the repayment date of its loan to 30 June.
On repayment of the STASCO loan, Orcadian said it would provide the industry partner with a security interest over its 18.75% stake in the Pilot field.
"We are delighted to have finalised this facility agreement with our partner, and we are looking forward to updating the market on our plans to build upon this partnership in the future," said chief executive officer Steve Brown.
At 0928 BST, shares in Orcadian Energy were down 3.05% at 9.21p.
Reporting by Josh White for Sharecast.com.
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