OREANDA-NEWS. June 14, 2011. Standard Bank Plc (Standard Bank), working in partnership with Pareto Commodities LLC (Houston), is pleased to announce the provision of a USD 37.5 million financing package to Central Brazil Cooperatief U.A. ("Central") and its subsidiaries. Central is an affiliate of Denver based Central Resources Inc, and on 27 May 2011 it acquired Koch Industries International B.V., an affiliate of Koch Industries, Inc., which, through its subsidiary, Koch Petroleo do Brazil Ltda. ("KPB"), operates an oil and gas exploration and production business in Brazil.

The six year multi tranche loan facility provided not only acquisition financing but will also provide for the operation’s ongoing working capital and capital expenditure needs. The facility was concluded within a challenging timeframe and has been designed to have substantial flexibility to accommodate Central’s development ambitions for the business. Standard Bank acted as sole bookrunner and administrative agent for the financing. The terms of the financing also entitle Standard Bank to a contingent interest participation.

KPB holds interests in six oil and gas fields, four in the Portiguar Basin of northeast Brazil and two additional fields near Rio de Janeiro in the Espirito Santo Basin.  The main two properties are the Redonda and Ponta do Mel Fields, together producing approximately 650 barrels of oil equivalent per day (boepd). The percentage of oil and gas produced is approximately 80% oil and 20% gas by volume. There is significant upside potential in the two producing fields through infill drilling and subsequent water flooding. Three of the other fields are highly prospective for exploratory drilling. Central will commence an extensive drilling program in the fourth quarter of 2011.

Paul J. Zecchi, President and CEO of Central Resources, Inc. said: “The acquisition of KPB is our initial entry into Brazil.  Not only do we see significant opportunity in developing the newly acquired properties, we also plan on using the talented members of our new team to grow our Brazilian presence.  The financing that Standard Bank provided was something no other financial institution proposed.  It is the solution we needed to fund this acquisition and gives us ample flexibility to grow.  We are pleased to have Standard Bank as a new partner in our business.”

Michael Jakubik, Head of Structured Commodity Solutions at Standard Bank Group said: “We are pleased to have worked with Central on this exciting acquisition. We believe that we have collaboratively engineered a loan structure that provides Central with the flexibility it needs while also aligning the interests of the organisations through an upside sharing mechanism. We hope that this transaction is the first of many.”