Niko Resources closes financing deals, settles dispute with Diamond Offshore

CALGARY – Niko Resources Ltd. (TSX:NKO) said Monday that it has closed deals to raise US$340 million in new senior secured term loans and C$33 million in a stock offering.

The oil and gas company also said it has agreed to pay US$80 million to Diamond Offshore to settle a dispute with the company over drilling contracts.

Shares in the company were up 62 cents or about 24 per cent at C$3.18 on the Toronto Stock Exchange before trading was halted pending the announcements Monday.

Niko said its earlier credit facility and secured loan agreements have been fully repaid and the outstanding principal amount of its unsecured notes has been reduced to about $13 million.

The remaining US$174 million of a US$320-million advance will be used to fund development of a project in India and for general corporate purposes, the company said.

The undrawn US$20 million loan is expected to be drawn in January if a deal with Hess Corp. related to a production-sharing contract is not closed by Jan. 15.

Niko has signed a deal with Hess for the assumption of a stake in a project located offshore in eastern Indonesia.

Niko has operations in India, Bangladesh, Indonesia, Madagascar, Pakistan and Trinidad.