Tullow Oil plc has sealed a refinancing deal with Glencore Energy UK Limited worth $400 million to cover its senior notes maturing in March 2025.
In its half year results for the six months ended 30 June 2023, Tullow Oil plc indicated that its total drawn debt was $2.2 billion. Of this amount, the “outstanding Senior Notes due 2025, amounting to $633 million nominal value, are due in March 2025,” the multinational oil and gas exploration and producer, said.
In today’s press statement, Tullow Oil says the new refinancing facility for its senior notes maturing in March 2025 is available to be drawn within 18 months. “The interest on the facility will be Term Secured Overnight Financing Rate (SOFR) plus 10% on drawn amounts,” the firm says.
Rahul Dhir, Chief Executive Officer, Tullow, said: “The proceeds from this facility, together with cash on balance sheet and $800 million of free cash flow expected to be generated during 2023 to 2025, will allow us to fully address all outstanding 2025 Notes and positions us for a successful refinancing of the 2026 Notes.”
Tullow has hedged the refinancing deal for its senior notes maturing in March 2025 by allowing Glencore Energy UK Limited to participate in the sale of its crude oil produced in Ghana and Gabon.
“Tullow is also pleased to announce that it has entered into oil marketing and offtake contracts with Glencore for Tullow’s crude oil entitlements from the Jubilee and TEN fields in Ghana and the Rabi Light entitlements in Gabon which run concurrently with the notes facility agreement,” Tullow Oil says, in its latest operational update.
Commenting on the transaction, Alex Sanna, CEO of the Oil & Gas Division of Glencore, said: “We are pleased to complete this landmark $400 million notes facility for Tullow, along with the term oil marketing and offtake contracts from Tullow’s production in Ghana and Gabon.
“This facility is a strong endorsement of Tullow’s business plan and strategy, and demonstrates Glencore’s capability in structuring finance solutions across the oil and gas sector.”
