Tullow shares rise on debt capacity news
Tullow Oil, an independent, London-listed, oil and gas exploration and production company, saw its shares rise eight percent on Thursday, after it announced its available debt capacity remained unchanged at $3.7 billion following a routine half-year review with the lenders. The company’s shares were at 169 pence Thursday afternoon.
The oil firm boasted that the unchanged Reserve Based Lend (RBL) amount reflected „the continued support of Tullow’s lending banks during this period of oil prices, and the high quality of Tullow’s asset portfolio.“
According to kslaw.com, Reserve Based Lend (RBL) is a loan secured by the undeveloped reserves of oil and gas of a borrower. The facility is repaid using the proceeds that derive from sales in the field or portfolio of fields in production.
Tullow further said that, as of September 30, 2015, the Group has cash and undrawn credit facilities amounting to US$2.1 billion of headroom with no near-term maturities.
Ian Springett, Chief Financial Officer said: “Today’s announcement demonstrates the robustness of Tullow’s debt capital structure and emphasises the strong support that we are receiving from our relationship banks. Generating such significant liquidity at this time reflects our prudent hedging programme and the quality of our producing and development assets. We are fully funded to meet all of our commitments including the ongoing investment in the TEN development. This important project remains on schedule and on budget to deliver first oil and significant additional cash flow in mid-2016.”
The company on Wednesday witnessed the naming ceremony of an FPSO to be deployed at its TEN development offshore Ghana. The unit named ‘FPSO Prof. John Evans Atta Mills’ is Ghana’s second Floating Production Storage and Offloading vessel.
Offshore Energy Today staff