Transeuro Energy Corp. (CVE:TSU) told investors on Monday that partner Aleator Energy has begun the drawdown process for a US$20 million loan to support a farm-in deal between the two parties on the Povorotnoye gas field in Crimea, Ukraine.
Citing from an Aleator Energy statement, Transeuro said that the finance and security agreements between Aleator's subsidiary and Gres Holdings Limited have been signed, completing the final condition for the loan facility.
Aleator has also provided Gres with notice to draw down the first tranche of US$10 million, with this process now underway, Transeuro said.
Funds from the first draw down will be used to secure one of the available drilling rigs, as well as to start mobilization and acquire the outstanding items for the drilling of the Pov 105 well, with a spudding date targeted for the third quarter.
Transeuro said the anticipated drilling time of the well will be anywhere from 55 to 70 days.
The junior oil and gas exploration and development company, which has properties in Canada and Ukraine, has retained a 10.8 percent interest in the joint activity agreement to develop the Povorotnoye gas field. Under the terms of the farm-in deal, the company will receive US$500,000 upon spudding of the POV 105 well.
Aside from being used for the POV 105 well, the $20 million in funds will also be allocated for the provision of a pipeline and plant to process and delivery anticipated gas and condensate when the well is completed and prepared for production.