Herbert Smith Freehills has advised Mercuria (as co-investor with Aleph Commodities) on its debt and equity investment in Angus Energy plc ("Angus"), an independent onshore petroleum development company.
The investment will support Angus's development of the Saltfleetby gas field, one of a number of its UK onshore gas assets, co-owned with Saltfleetby Energy. It will also support Angus on its energy transition projects, including repurposing onshore hydrocarbon wells for geothermal energy production and storage.
The financing arrangements involve Mercuria and Aleph Commodities providing a £12 million loan to Angus and its subsidiaries, and Mercuria entering into commodity swaps with the project company. Mercuria and Aleph Commodities also agreed to subscribe for shares in Angus over the life of the loan, and entered into revenue-sharing agreements with Angus and Saltfleetby Energy. Financial close for the transaction was achieved on 28 May 2021.
Herbert Smith Freehills' London Finance team was led by partner Will Breeze, supported by senior associate James Foo and associate Letizia Corsi on the debt financing. Corporate partner Laura Hulett, senior associate Shaun Williamson and associate Amrit Gill advised on the revenue-sharing agreements and the corporate aspects of the transaction. Additional support was provided by partner Isaac Zailer on tax and partner Nick May and senior associate James Foo on hedging.
A separate team of partner Matthew Job and senior associate Edgar Monteiro advised Law Debenture, the security agent for the transaction.
Will Breeze commented: "Mercuria is a longstanding client of the firm, and they have publicly stated that energy transition projects is now a key focus of their investment strategy. We are therefore delighted to have assisted on one of their energy transition projects, and our involvement on this transaction is a testament to Herbert Smith Freehills' reputation in the energy sector."
Burness Paull provided Mercuria with Scottish law advice.
Angus was advised by Fladgate on the English law aspects of the transaction and MacRoberts on the Scottish law aspects of the transaction.
Aleph Commodities was advised by Reed Smith and Saltfleetby Energy was advised by Hill Dickinson.