Octant Energy to Raise $10 Million To Finance Kenya, Tanzania Blocks Acquisitions

Octant Energy has announced it has entered into a term sheet with Rosseau Asset Management to proceed with a financing of up to USD$10,000,000 through the issuance of secured convertible debentures to finance the acquisition of Afren’s assets in East Africa namely Kenya’s Block L17/L18 and Block 1 as well as the Tanga Block in Tanzania.

The principal amount of the Financing shall be convertible into common shares of Octant at a price of USD$0.075 per Common Share for a period of up to four (4) years after the closing
of the first tranche

The indebtedness under the Financing will bear interest at a rate of 8% per annum, payable annually in arrears on the anniversary date of the initial close through the issuance of Common Shares and will have a maturity date of four (4) years after the closing of the first tranche of USD$1,000,000 which will be used by Octant to complete the acquisition of the Tanga Block.

The first of three tranches will be advanced upon certain conditions being satisfied in connection with the establishment of security for the Financing (including subsidiary guarantees and general security agreements) and board.

Afren block L17,18The remaining two tranches are each in the amount of USD$4,500,000 and will be advanced to Octant to complete the acquisition of Kenya Block L17/L18 and Kenya Block 1. Octant however warns there is no assurance that the remaining two tranches of the Financing or that the Proposed Transactions will be completed.

“The position taken by Rosseau to support the efforts of Octant in its acquisitions speaks volumes about the quality of these assets. I look forward to moving these assets forward expeditiously in a meaningful way and positively enhancing the value for all interested parties including the people of Tanzania and Kenya,” Rick Schmitt, CEO & President of the Corporation, commented.

Concurrently with the closing of the first tranche, the Corporation has executed an Investor Rights Agreement with RAM which will see two nominees appointed by RAM to be appointed to the board of directors  as independent members.

To this regards two directors at Octant have tendered their resignation while Trevor Peters and Wishart Robson have been appointed to the board of directors.

Octant Energy which entered into three agreements with subsidiaries of Afren plc to acquire assets in the Republic of Kenya and the United Republic of Tanzania in October 2015 reports that progress is being made in connection with the satisfaction of the conditions for completion of the Proposed Transactions The agreements to consummate the Proposed Transactions have a long stop date of April 30, 2017.

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