Yanchang Petroleum International’s Two Ordinary Resolutions Were Passed by Shareholders
Receives US$22 Million Loan from Controlling Shareholder to Support Capacity Expansion Plan for Canadian Novus
HONG KONG SAR - Media OutReach - 2 September 2021 - Yanchang Petroleum International Limited ("Yanchang Petroleum International" or the "Company"; Stock Code: 00346) announced that two ordinary resolutions as proposed by the Company were duly passed at the Special General Meeting. Pursuant to which, Yanchang Petroleum Group (Hong Kong) Co., Limited ("Yanchang Petroleum HK") conditionally agreed to provide the loan of US$22,000,000 (equivalent to approximately HK$170,675,000) to the Company for a term commencing from the Utilisation Date and expiring on the third anniversary of the Utilisation Date, at the interest rate of 4.8% per annum.
In order to seize the favourable opportunity of rising international crude oil prices and of significantly improving market demand for petroleum in the North American market, the Company is making an effort to optimise production and operation arrangements, as well as increase in the production capacity and sales of crude oil. The loan will enable the Company to obtain adequate funds to meet Novus' financial needs for expanding its production capacity, with approximately 92.6% of the loan amount (representing approximately HK$158.0 million) to be used for the drilling of the 26 new oil wells and approximately 7.4% of the loan amount (representing approximately HK$12.7 million) to be used as general working capital of Novus.
Mr. Feng Yinguo, Chairman of Yanchang Petroleum International, said, "The loan demonstrates the continuous financial support provided by our controlling shareholder to the Group. The Group will seize the favourable environment of the structural recovery of international oil and gas industry and propel production and operation, business expansion, quality and efficiency improvement, introduce strategic investors and other works to lay a solid foundation for the long-term development of the Company in future, maximising returns for our shareholders."
Yanchang Petroleum HK is wholly owned by Shaanxi Yanchang Petroleum (Group) Co., Limited ("Yanchang Petroleum Group"), holding 69.19% of the issued share capital of the Company. The principal activities of Yanchang Petroleum HK are investment holding and trading of crude oil. Novus is a wholly-owned subsidiary of the Company in Canada, engaging in the business of exploration, exploitation and production of oil and natural gas in Western Canada.
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