Hartshead Resources NL and Viaro Energy Ltd have secured a significant advancement in their joint venture through their respective subsidiaries — Hartshead Resource Ltd and RockRose Energy.
The partners have successfully negotiated amendments to their Farm-out Agreement (FOA) and Joint Operating Agreement (JOA), introducing a robust financing framework for the phase one development of the UK Southern Gas Basin Licence P2607.
Hartshead Resources has secured the option to divest an additional 20 per cent equity interest in Licence P2607.
In exchange, RockRose will provide an uncapped free carry covering all gross costs for phase one project development, effectively serving as a financing backstop.
The amended farm-out agreements ensure full funding security for 100 per cent of the phase one project development costs.
Post Final Investment Decision (FID), Hartshead will retain the option to activate the Financing Backstop once the existing RockRose carry for phase one is fully utilised.
This move could elevate the total committed project funding to over $800 million.
Hartshead will maintain the flexibility to retain its 40 per cent interest in the project, with the option to seek alternative funding sources.
The existing phase one cash bonus has been transformed into an additional $54.7 million in work programme carry, which is applicable if Hartshead retains its 40 per cent interest.
The agreement ultimately preserves the bonuses of phase two — amounting to $9 million in cash.
