viewZeta Petroleum PLC

Zeta Petroleum clinches funding from major shareholder


Zeta Petroleum (ASX: ZTA) has agreed the terms of an US$850,000 loan with GM Investment & Co, a major shareholder in the company.

The loan will be used to help fund the Zeta's 2014 work program, increasing oil production, and also support working capital.

The Loan is for a period of 48 months, has a 10% coupon with interest being accrued monthly and paid upon maturity, and is secured over the assets of Zeta.

Monthly repayments will commence in month seven after drawdown with the option to repay in advance of term if cashflow allows.

Under the terms of the loan agreement GM will be granted options over 5,000,000 Zeta shares at an exercise price of $0.05, with a 6 year expiry.

This loan from our supportive shareholder is a show of confidence in Zeta's oil assets and the valuation of Zeta, presently just $1.6 million.

Last month, Zeta signed a non-binding term sheet to acquire private company Stikito Ltd. which has a 100% owned interest in four oil and gas production and exploration licences in the prolific Volga Urals basin, Russia.

The licences currently produce about 220 barrels of oil per day, and host estimated proved and probable reserves of 12.8 million barrels of oil equivalent.

Zeta is due to pay US$2 million in cash within 15 days of signing a binding legal agreement and issue 155 million shares priced at $0.05 each.

Should the assets maintain average oil production in excess of 220bopd for 90 days, the company will also pay the vendor an addition US$1 million.

VES is located close to the supergiant Orenburg field, and the world class Karachaganak field.

In order to fund the initial upfront acquisition cost, Zeta has signed a heads of terms with an existing shareholder for a US$2 million convertible loan, with 50% of the loan convertible at $0.01 per share and 50% of the loan convertible at the lower of $0.03 and the average 30 day share price prior to conversion.

In addition, the lender will be granted 10 million share options with an exercise price of $0.05 for a period of 3 years.


Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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