As part of the facility, MB would have a lean/mortgage over all of OEL's producing assets as security. This should be documented in the Annual Report. So OEL can not sell any producing assets unless MB agree, and that agreement would require most if not all proceeds to rapy the loan.
If production declines below 1,900boepd, then they would breach their loan agreement, and they are in a lot of trouble. There would most likely have been a production covenant when the loan was signed, and it may have been changed slightly in the latest negotiation.
It is also possible/likely(?) that the latest changes are a result of a scheduled (6 monthly?) review of the facility, rather than being prompted by the GC result.
OEL Price at posting:
1.2¢ Sentiment: None Disclosure: Not Held
