Providence agrees multi-million debt facility
OIL and gas explorer Providence Resources said yesterday it has secured a multi-million dollar facility with Deutsche Bank.
The six and a half year debt facility was secured through a "prepaid oil swap transaction" with the bank, which will see the company sell a percentage of its production at the Singleton field in the UK to Deutsche at an agreed forward price. Terms of the deal were not disclosed.
Providence said it intended to use the funds to repay its existing reserve base lending facility and to facilitate the ongoing development plan for Singleton. The facility replaces one the company had with BNP Paribas, which has been repaid and cancelled.
Chief executive Tony O'Reilly was "extremely pleased" to have agreed the funding.
"This innovative facility allows us to avail of today's higher pricing environment for the term of the facility. Importantly, it provides the operational and financial flexibility that will allow us to focus on increasing Singleton production rates," he said.
Deutsche Bank's global head of oil sales, Brian Cumming, said: "Our platform prides itself on its ability to offer unique financing solutions for clients.
"We were delighted to structure a prepaid swap with Providence that not only allows them to capture very attractive commodity prices but also allows them to better match the term of the debt to the increasing life of the Singleton oil field."