Posted by OilVoice Press - OilVoice
Matra Petroleum ("Matra") plans to double its capital expenditures in 2018 to MUSD 11 (2017: MUSD 5.2) and accelerate drilling and development activities on the company's leases in the Texas Panhandle. Starting in May through 2018, the company plans to drill 24 new wells to increase oil and gas production. In addition, an extensive program to improve oil and gas production from existing wells will be executed through workovers and reopening of shut-in wells.
Matra has closed the financing transaction announced on March 14, 2018, with entities controlled by Melody Capital Partners, LP ("Melody") under which Melody will provide additional capital to fully fund Matra's 2018 drilling and development program. The current loan agreement has been amended to allow Matra to borrow up to an additional MUSD 10.
In addition, Matra and Melody have further specified the terms for the acquisition of oil and gas leases for MUSD 6.2. Matra will assume 4 MUSD in debt and direct a share issue to Melody for MUSD 2.2 for the acquisition. Matra has agreed to issue 4,593,435 shares in Matra to Melody, valued at MUSD 2.2, which represent 10.38% of the outstanding shares after the transaction. The acquisition remains subject to final agreements and is expected to be completed in April 2018.
"Matra's asset base offers significant development opportunities, and we remain committed to further optimizing drilling and production toward our long-term production target of 6,000 boe per day. Our primary objective is to convert undeveloped reserves to further production growth in 2018. We also expect to add production in our operating area through the recently announced acquisition. Increasing production and higher oil and gas prices will support Matra's revenue, cash flow and earnings going forward," says Maxim Barskiy, CEO of Matra Petroleum AB.
"Melody is excited to continue our partnership with Matra and to support and enable Management's development plan and vision for the future. Maxim Barskiy and his team have a strong, proven track record and the ability to drive meaningful value creation with our strategic investment" says Blake Yaralian, a principal at Melody.
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