Tullow Oil signs $ 1.7 billion reserve-based loan deal with banks


A worker walks at a Tullow Oil exploration drilling site in Lokichar, Turkana County, Kenya, February 8, 2018. REUTERS / Baz Ratner / File Photo

February 26 (Reuters) – Tullow Oil Plc (TLW.L) announced on Friday that it had accepted a new reserve-based loan of around $ 1.7 billion with its banks, bringing its liquidity to around $ 900 million, including including available cash and available debt.

The oil and gas company, which has been in talks with creditors including bondholders to deal with a possible tightening of liquidity due to the drop in demand for oil, said the loan had been reduced by approximately $ 1.8 billion based on six months of production and disposal of certain assets. to the Norwegian energy company Panoro (PANN.OL).

Tullow raised the prospect of a possible liquidity tightening in September during a debt covenant test in January, and last month lenders said lenders agreed to extend talks over a loan based on reserves, which are usually secured by a borrower’s oil and gas reserves, until February. .

The London-listed company said it was confident it would reach an agreement with creditors in the first half of this year to refinance its debt. Tullow had $ 2.4 billion in net debt at the end of 2020.

It has reorganized its business to focus on squeezing its offshore fields in Ghana and phasing out some of its other assets, and said in January that it expects operating cash flow to hit 500. million dollars in 2021 if oil prices remain above $ 50 a barrel.

The company, with market capital of around 626 million pounds ($ 872 million) at the last close of its shares, said it expects lenders to reconsider the reserve-based loan in September. .

($ 1 = 0.7179 pounds)

Report by Pushkala Aripaka in Bangalore; Editing by Rashmi Aich

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