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Petroneft secures $15m funding from Arawak Energy

SIBERIAN-focused explorer Petroneft says it has secured extra funding to maintain drilling operations at its wells in Northern Russia.

The company, which has two main assets in the Tomsk Oblast region of Siberia, said it secured $15m (€12m) in additional funding.

The capital will come from a three-year loan agreement with Arawak Energy. It is secured against Petroneft's 50pc interest in its Licence 67 site at Tomsk Oblast.

In a statement, Petroneft said the loan would be repayable in lump in 2015, and the interest rate will be Libor plus 6pc. One year Libor -- the rate banks lend to each other, is currently a little over 1pc.

Under the terms of the loan, Arawak also receives four million warrants at 14c per share.

Petroneft already has a $30m facility with MacQuarie Bank. That remains in place.

The financing will be used in part to drill as many as 10 new production wells on its Licence 61, with the first to come online between July and September.

Company chief executive Dennis Francis said he was "delighted" with the deal.

"We will now focus on developing [Licence 61] and seek to build on our existing production profile and positive cashflows throughout the remainder of the year," he claimed.

Meanwhile, close to a fifth of shareholders in rare earths miner Kenmare Resources voted against the directors' pay packets at the company's AGM yesterday. Some 19.6pc of all investors voted against the board's remuneration report, while another 19.2pc withheld their votes. Of the total number of shares caste at the meeting, 24.2pc rejected the pay packets.

Last year, company boss Michael Carvill took home a total of $1.9m. while financial director Tony McCluskey earned a total of $1.3m.

Kenmare is the latest in a string of companies all over the world that have been heavily criticised for what are perceived as excessive pay packets awarded to executives, even if the firms have been performing relatively well. The head of the insurer Aviva resigned after investors voted down his executive pay.

Irish Independent