Tullow’s FPSO in Ghana / Image by: PGMcCardle / MarineTraffic.com
Tullow Oil Plc said on Friday it had accepted a new reserve-based loan of about $ 1.7 billion with its banks, bringing its liquidity to about $ 900 million, including available cash and available debt.
The oil and gas company, which is in talks with its creditors, including bondholders to deal with a possible liquidity shortage due to the drop in demand for oil, said the loan had been cut by about $ 1.8 billion based on six months of production and disposal of certain assets to Norwegian energy company Panoro.
In September, Tullow raised the prospect of a possible liquidity tightening during a debt covenant test in January, and last month lenders agreed to extend talks on a reserve-based loan, which are generally 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 divesting some of its other assets, and said in January that it expects operating cash flow to reach $ 500 million 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)
(Reporting by Pushkala Aripaka in Bangalore; editing by Rashmi Aich)