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Permex Petroleum secures $5M loan to advance business in Permian basin

"Permex intends to use the financing to acquire-and-exploit continued opportunities throughout the Permian basin
Permex Petroleum secures $5M loan to advance business in  Permian basin
Permex has assets in west Texas and south east New Mexico.

Permex Petroleum Corp (CSE:OIL) told investors it had secured a US$5 million loan facility to advance activity in the Permian basin.

The agreement is with R.C. Morris Capital Management Ltd and the junior oil group can take an an initial cash sum of US$2 million, it revealed.

The loan will due to be paid back in full 36 months post-closing date and interest will accumulate at a rate of 16.75% per year and paid monthly in arrears.

"Permex intends to use the financing to pursue play extension and acquire-and-exploit continued opportunities throughout the Permian basin by applying the same geologic and petrophysics-driven thesis used in their acquisitions to date," the company said in a statement.

"The financing will allow an increase in monthly net cash flow by acquiring interests in producing properties with good potential for additional production increase once enhancement work has been undertaken by Permex.

"These producing properties and working interests that the company has narrowed down for acquisitions are within the Permian basin."

Last week, Permex revealed it was poised to bolster output and increase cash flow next quarter - as it will kick off its enhanced oil recovery (EOR) waterflood program at the Bullard Tannehill asset in Texas this week.

After the firm completed modelling work, it decided that water injection would have a significant positive affect on production

The junior oiler has assets across the Permian Basin of west Texas and the Delaware Sub-Basin of south east New Mexico.

Permex shares were unchanged at $0.275.

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