Tullow Gets $450M Lending Boost from Creditors, Shares Climb
LONDON, March 20 (Reuters) - Africa-focused oil producer Tullow Oil said it had raised an additional $450 million of capital from existing lenders, boosting its financial strength despite weak oil prices and sending shares higher on Friday.
Tullow, which posted its first loss in 15 years last year, said its total committed debt facilities were now around $6.3 billion with no near-term maturities, placing it in a strong financial position.
Tullow's lenders have agreed to extend existing commitments by $200 million, increasing available debt to $3.7 billion. It also secured an additional $250 million through a corporate debt facility that has now risen to $1 billion.
"Today's announcement demonstrates the resilience of our debt capital structure and the quality of our portfolio to generate significant liquidity, even at low oil prices," said Ian Springett, Tullow's chief financial officer, in a statement.
Shares in Tullow traded up to 6 percent higher in early trading on the London Stock Exchange, making it one of the top risers among the bourse's FTSE 100 companies.
Tullow also said it had amended its debt agreements in a way to shield itself from any potential covenant breaches.
Shares in Tullow fell two weeks ago when news emerged that a maritime border dispute between Ivory Coast and Ghana could delay one of its flagship oil projects.
"We see the expansion of the RBL (reserve based lend) as an endorsement of management's view that the dispute should not alter the pace of development activity," analysts at Barclays said.
(Reporting by Karolin Schaps; Additional reporting by Sarah Young, editing by Paul Sandle and William Hardy)
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