As separately announced today, Niko Resources Ltd. ("Niko" or the "Company") (TSX:NKO) has secured $340 million of loan facilities, closed its offering of equity securities for net proceeds of approximately $30 million, and executed a settlement agreement with Diamond Offshore. The Company's prior credit facility and secured loan agreement have been fully repaid, and the outstanding principal amount of its unsecured notes has been reduced to approximately $13 million. The $174 million of net proceeds from the above transactions provides significant financial capacity for the Company's planned capital program, focused primarily on developing and appraising the assets in the D6 Block in India.
The Company's development and appraisal expenditures in India and Bangladesh are forecast to be approximately $175 million over fiscal 2014 and fiscal 2015 combined (including $19 million expended in the first half of fiscal 2014). The MA-8 development well in the MA field in the D6 Block to be brought on-stream at the end of December and a three-well workover program that has commenced in the Dhirubhai 1 and 3 gas fields are expected to increase volumes from the block in the fourth quarter of fiscal 2014 and additional development activities are planned for these fields in fiscal 2015. The results of this activity and the increased prices for gas sales commencing April 1, 2014 for the D6 Block are expected to significantly increase the Company's cash flow from operations in the coming years. Drilling of the MJ-A1 appraisal well, a follow-up to the significant gas and condensate discovery at MJ-1, is ongoing and results of the well are expected in January.
Outside of India and Bangladesh, the Company executed a farm-out agreement in December with Range Resources Limited for 50 percent of the Company's interests in the Guayaguayare Shallow and Deep PSCs in Trinidad, which is subject to government approval. Range is expected to earn its interest by funding two onshore commitment wells and a potential appraisal well at its sole expense, and will share the cost of drilling an offshore commitment well equally with Niko. The first onshore well is targeted to spud in early 2014. This farm-out is the part of the Company's strategy to maintain optionality in its exploration portfolio by farming out portions of its interests in many of its exploration PSCs and rescheduling its exploration commitments. Over the next few years, the Company plans to restrict its exploration expenditures, net of proceeds of farm-outs and other arrangements, to less than $35 million per year.
