29th Nov 2018 18:36
LONDON (Alliance News) - Eland Oil & Gas PLC confirmed Thursday it has refinanced its existing reserve-based lending facility with a new USD75 million facility, provided by a syndicate of lenders and secured against the company's producing assets in OML 40, in Nigeria.
The new reserve-based lending facility has a maturity of five years, the repayments of principals are due on a semi-annual basis, so the outstanding balance of the facility will not exceed the lower of the base amount and the facility amount.
There is a one-year "grace" period before any principal amount is repaid and the interest rate payable under the facility is Libor plus 7.5% - assuming the total amount outstanding is lower than 50% of the higher of total commitments and the borrowing base amount.
A Libor plus 8% interest will be applied in all other cases.
"The substantial increase in our reserve-based lending facility reflects Eland's strong operational delivery over the last few years and represents an endorsement of the quality and potential of our assets," said Chief Executive Officer George Maxwell.
The USD 75 million facility is from Stanbic IBTC Bank PLC and Mauritius Commercial Bank.
Eland is looking to syndicate a further USD25 million to a third lender in the "near-term".
The facility has the potential to increase up to a maximum of USD200 million, subject to incremental reserves and production.
Eland currently has cash balances of USD30 million and an existing USD27 million of debt drawn. The new facility will be used to refinance the current debt and provide "low cost strategic capital" for growth to support the ongoing developments of the Gbetiokun field, the wider OML 40 licence and general corporate purposes.
Maxwell added: "The funds, together with our current cash reserves and strong operating cashflow, ensures that we can continue our significant investment programme across OML 40. Our investment to date has driven net production from zero to over 13,500 barrels of oil per day and yielded great benefits to all stakeholders in the licence area."
Shares in Eland Oil & Gas closed up 0.9% Thursday at 108.50 pence each.
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