Zoltav: Shareholders Loan $12m to further Develop the Bortovoy Licence

Zoltav (AIM: ZOL), the Russia-focused oil and gas exploration and production company, provides an update on financing for the ongoing exploration programme to assess the resource potential of the Carbonian and Devonian structures in the Western Fields of the Bortovoy Licence, Saratov.  

As previously stated, Zoltav believes there is potential to yield substantial additional reserves and production from the Carbonian and Devonian horizons which, if proven, would have a transformational impact on the size of the Bortovoy asset. An exploration programme to assess these structures began in 2017 with the acquisition of 180 sq km of 3D seismic (which is currently being processed); and the Company announced in January 2018 the initiation of the next phase of the work programme with the acquisition of up to a further 536 sq km of 3D seismic (of which 140 sq km has been completed to date).

In support of the ongoing exploration programme, Zoltav’s two largest shareholders, ARA Capital Holdings Limited (the parent company of the direct shareholder, ARA Capital Limited) and Bandbear Limited, have entered into an agreement with the Company for the provision of an unsecured loan facility of up to an aggregate US$12 million (the “Loan Facility”). The Loan Facility will be made available for a period of up to two years with a 0 per cent interest rate for that period; and a 10 per cent interest rate thereafter if not repaid within two years. It may be drawn down by the Company in installments according to its requirements. Any amounts drawn down under the facility are repayable on demand.

ARA Capital Holdings Limited and Bandbear Limited are substantial shareholders of the Company and are therefore regarded as related parties as defined by the AIM Rules for Companies (the “AIM Rules”). The Loan Facility as described above is a related party transaction for the purposes of Rule 13 of the AIM Rules. The directors of Zoltav, with the exception of Andrey Immel who is a representative of Bandbear Limited, consider, having consulted with the Company’s nominated adviser, SP Angel Corporate Finance LLP, that the terms of the related party transaction are fair and reasonable insofar as the shareholders of the Company are concerned.

Lea Verny, Independent Non-executive Chairman, commented:

“We are pleased that our two largest shareholders have provided a loan facility in support of our work programme. The exploration programme targeting the deeper structures at Bortovoy could, if successful, yield a significant uplift in the size of the Bortovoy resource. We look forward to reporting progress as the programme advances.”

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.