Oxnard Benton Oil & Gas Raises $15 Million

Benton Oil & Gas Co., an Oxnard-based petroleum exploration and production firm, said it has issued $15 million in unsecured notes to John Hancock Mutual Life Insurance Co.

The 13% notes are due Sept. 30, 2002, with principal repayments of $3 million due annually beginning in 1998. The company also said it has issued warrants entitling John Hancock to purchase 250,000 shares of Benton stock, or 1% of the company’s outstanding common shares, at $9 per share.

The bulk of the proceeds, the company said, will be used primarily for drilling development wells and building production facilities for the company’s Venezuelan project, where Benton is under contract to reactivate and further develop three oil fields. The balance of the proceeds will be used for drilling and development activities in the company’s projects on the Gulf Coast and in Russia.

The issuance of notes to John Hancock will help alleviate the financial bind Benton has faced since February, when Venezuelan investors forced the company to pay off $15 million in commercial paper.

The investors, who were expected to purchase the commercial paper for another 60-day term, balked at that arrangement one month after the collapse of Banco Latino, Venezuela’s second-largest bank.