Irish independent Tullow Oil has secured new funding through its existing credit facilities. Through reworking someof its existing credit facilities the company has secured $450 million of capital. Tullow completd the six-monthly Reserve Based Lend (RBL) redetermination process; the quality of its asset portfolio supported a $200 million increase in lenders commitments and increased available debt capacity from $3.5 billion to $3.7 billion, despite lower oil prices.
Its corporate facility was increased from $750 million to $1 billion which allowed for the company to arrange an additional $250 million in lenders commitments. It also agreed to an amendment to the financial covenant on the RBL and corporate facility to address the risk of any potential covenant breach during a period of oil price volatility and investment in production and development assets in West Africa.
As a result, the Group has around $6.3 billion of currently committed debt facilities with no near term maturities.
Ian Springett, CFO of the company said:“Today’s announcement marks another important step in the comprehensive re-setting of our business and financing and demonstrates the resilience of our debt capital structure and the quality of our portfolio to generate significant liquidity, even at low oil prices. We have diversified our balance sheet, significantly reduced exploration capital expenditure, restructured the business to generate projected savings of $500 million, suspended the dividend and are also benefiting from our ongoing hedging program. The strong support we have received from our relationship banks ensures that Tullow is well funded and is an important endorsement of our financial strategy and assets.”