Tullow Oil secures $2.5bn debt refinancing
Anglo-Irish exploration firm Tullow Oil has completed the refinancing of $2.5bn of Reserves Based Lending ("RBL") credit facilities.
The transaction, which was formally launched in early October following the resolution of the Ghana – Ivory Coast border dispute, was materially over-subscribed and extends the maturity of the group's existing RBL credit facilities.
Tullow has also decided to reduce the commitments of its revolving corporate credit facility to $600m from $800m, ahead of the scheduled amortisation in January 2018.
"The refinancing of our RBL credit facility was a key objective for 2017 and we are very pleased to have completed this process in line with stated guidance and ahead of our year-end target," Les Wood, chief financial officer of Tullow, said.
"The success of this transaction clearly demonstrates the high quality of the group's assets, our ability to generate free cash flow and the strength of our long-standing banking relationships."
The $2.5bn of credit facilities are split between a commercial bank facility of $2.4bn and an IFC facility of $100m.
The fully committed facilities are revolving with a three-year grace period and final maturity of November 2024.
Following the refinancing of the RBL credit facilities and the reduction of the revolving corporate credit facility, Tullow has total headroom including free cash of $0.9bn with no material near-term debt maturities.
Mr Wood went on to say that Tullow would be entering 2018 in a “strong” financial position.
In September it was confirmed that the agreement between Ghana and Ivory Coast meant that Tullow's huge offshore TEN oil fields off Ghana will not be impacted by any change in national boundaries.
The rate of oil production at the fields is expected to eventually increase from about 50,000 barrels of oil a day to the TEN field designed capacity output of 80,000 barrels a day.
Tullow owns a 47pc stake in the TEN fields. It also has a 35pc holding in the huge Jubilee oil field, which is also offshore in Ghanaian waters and close to the TEN project.