13th Jun 2014 07:04
LONDON (Alliance News) - Tullow Oil PLC Friday said it has refinanced its USD330 million Norwegian exploration loan facility, increaing the facility to USD500 million and extending the loan availability to the end of 2017.
The FTSE 100 oil and gas exploration company said the arrangement replaces a previous facility arranged by Spring Energy before it was acquired by Tullow Oil in January 2013. It was due to expire in December 2014.
The company said Norwegian lender DNB ASA and Sweden's Skandinaviska Enskilda Banken AB acted as bookrunners and coordinating banks for this facility, which was significantly oversubscribed.
"This USD500 million facility provides pre-funding for approximately 75% of our exploration and appraisal investment on the Norwegian Continental Shelf," Chief Financial Officer Ian Springett said in a statement. "The significant oversubscription demonstrates the strength of our banking relationships and our ability to access debt capital markets. We remain in an excellent position to fund all our activities across the portfolio with strong liquidity and considerable financial flexibility."
The news comes after the company announced in May that it will abandon and plug the exploration well 31/2-21S in the Gotama prospect, offshore Norway, after its drilling programme failed to encounter reservoir quality sandstones in the Upper Jurassic main target.
The company said that while the well encountered reservoir quality sandstones in the secondary targets, these intervals were water wet.
Tullow Oil also has been pushing ahead with its stategic sale of its UK North Sea assets in recent months, selling stakes in two assets to Faroe Petroleum PLC for up to USD75.6 million plus a royalty on developments at one of the assets, in April.
"The UK North sea is something we want to get out of and right now it feels like we are moving back to a buyers market," Chief Executive Aiden Heavey told Alliance News at a media briefing during April. "But there is no urgency as our balance sheet remains strong and we are not giving up on the North Sea, we remain committed to our Norwegian assets."
Tullow Oil share were up 0.5% at 846.00 pence at the open Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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