Tullow Oil refinances credit facility but stock falls 2.5pc
Published 08/11/2012 | 05:00
SHARES in Tullow Oil have fallen despite the company completing a refinancing of its multibillion-euro credit facility.
In a statement, Tullow said it had closed the refinancing of a $3.5bn (€2.75bn) reserves-based lend (RBL) credit facility.
The new arrangement replaces the previous facility, which had been due to expire in 2015.
It has been split between a senior facility of $3.235bn, a junior facility of $100m and an International Finance Corporation (IFC) facility of $165m, all with a final maturity of November 2019.
Tullow also has an option to increase the senior facility by up to an additional $500m if it gets further commitments from lenders.
The facility has been agreed with a 27-bank syndicate, including the IFC, which is a subsidiary of the World Bank and is used for financing projects in developing countries.
Tullow chief financial officer Ian Springett said the company was "very pleased".
He added: "In conjunction with our strong operating cash flows, this will provide a solid foundation for funding our major development projects in Ghana, as well as other capital investments.
"The very positive support which we received from our relationship banks is welcome at a time of continuing uncertainty in global capital markets."
Elsewhere, Fastnet Oil & Gas said it would take up its option to buy into a drilling licence in North Africa.
The Dublin-based company said it had agreed to exercise its option over a 50pc share of a proposed oil and gas exploration licence application onshore in Morocco.
The 'Merada Licence Application', as it is known, is subject to approval by Moroccan authorities.
In London, Tullow was caught up in the wider sell-off and closed down 2.5pc. Meanwhile, Fastnet rose 3.9pc to 26.8 pence.