Elk Petroleum, Denbury Onshore and Benefit Street Partners, Elk’s mandated lender, have agreed that the closing of the Grieve CO2 Enhanced Oil Recovery Project Joint Venture restructure and the $58 million loan facility will occur simultaneously on or before August 5, 2016.

As previously announced, Benefit Street Partners received final credit approval to provide Elk with a $58 million senior debt loan facility to be used in connection with the Grieve Project JV restructuring. The closing of this debt facility was subject to definitive legal documentation and targeted for the second half of July 2016.

Definitive loan documentation with Benefit Street Partners is well advanced with comments on the central credit agreement already having been exchanged. All ancillary loan documents are anticipated to be exchanged during the coming week. Benefit Street Partners is also engaging directly with Denbury to make sure certain loan arrangements are accommodated in the Grieve Project JV restructuring agreements.

To accommodate simultaneous closing of the Grieve Project JV restructuring and Elk’s $58 million senior debt financing, Elk and Denbury have executed an extension agreement setting a deadline of August 5, 2016 for the simultaneous closing of both the JV restructure and the associated senior debt financing with Benefit Street Partners. In order to maintain continued progress on the development of the Grieve CO2 EOR Project, Elk has made a further payment to Denbury of $1.5 million, the final amount required to be paid at closing under the Grieve Project JV restructuring agreements. Subsequent progress payments of a further $51.5 million comprising debt and equity contributions will continue under the fixed price turnkey contract between Elk and Denbury following closing.

Elk’s managing director commented: “This is a great outcome for the company. We can now make sure that there is a seamless fit between the Grieve Project JV restructuring with Denbury and the $58 million senior debt financing with Benefit Street Partners. This avoids the company having to make later changes in the JV restructuring agreements necessary to complete the debt financing. Overall, this makes successful completion of the transaction much lower risk for both Elk and our joint venture partner, Denbury. All three parties – Elk, Denbury and Benefit Street Partners are all working together to make this happen.”

Elk is being advised by Miro Advisors and Norton Rose Fulbright for the senior loan facility and Grieve JV restructure.