French bank BNP Paribas has shown its commitment to North Sea oil and gas production by arranging a $400 million for Ithaca Energy, the UK Continental Shelf-focused explorer and producer reported Tuesday.
The move by BNP looks positive for the sector after the bank's decision in January this year to put up for sale $11 billion of loans to the oil and gas industry – which oil sector analysts at the time said was a bad sign for junior explorers looking for credit.
The deal announced Tuesday means that BNP is still in the game when it comes to particular assets.
"It's an illustration of what BNP Paribas thinks about the quality of Ithaca's assets," a spokesman for Ithaca told Rigzone.
The $400 million fully-underwritten facility, combined with a cash balance of $110.6 million at the end of 1Q 2012, means that Ithaca has the financial capacity to deliver growth from both its existing asset portfolio and from new asset additions, the firm said.
"Establishment of the significantly increased debt facility highlights the intrinsic value of Ithaca's existing portfolio of assets and the immediate availability of over 95 percent of the facility provides substantially enhanced financial resources with which to continue driving forward the company's growth plans," said Ithaca Chief Financial Officer Graham Forbes in a press statement.
Xavier Venerea, Global Head of Structured Debt at BNP's Upstream Oil & Gas division, commented: "The full underwriting of this facility demonstrates our confidence in Ithaca's management team to further grow the company and more generally is a good example of BNP Paribas' commitment to the UK North Sea Oil and Gas industry."
On Monday it was reported that Ithaca had achieved first oil from its Athena oil field in the Outer Moray Firth off the east coast of Scotland.
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