Eland Oil & Gas PLC (AIM: ELA), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to announce the syndication of its Reserve Based Lending (“RBL”) facility and a significant increase in its drawable capacity.
The Company’s current existing facility of $35 million with Standard Chartered Bank, has now been syndicated to include The Mauritius Commercial Bank Ltd and Mercuria Energy Trading S.A., on a purely debt financing basis, with all three institutions holding an equal position. The facility has a borrowing base amount of $40 million, which is in excess of the existing facility amount of $35 million, and is based on only Opuama-1, -3 and -7 production and cash flows. The security of the revised facility remains unchanged.
Of the available facility only $15m is currently drawn. The extra headroom will be conservatively used, along with the regular cash inflows from Opuama production, to support the funding of the remaining Opuama infill wells, growing Opuama’s production to over 30,000bopd in H1 2018, as well as supporting the development of other Company assets.
The facility originally had a maturity of four and a half years from 31 December 2014 and is repayable by end-June 2019. The syndicated facility has been amended and restated with the same maturity, principal repayments commencing in H2 2018, interest on a quarterly basis at a rate of USD LIBOR plus a margin of 9% (an increase of 1.25% on the previous pre-syndication margin of 7.75%) and a single borrowing base re-determination in mid-2018.
The Company has current cash position of $17.4 million. Furthermore, a total of 242,500 barrels of crude was lifted from Forcados terminal in November with funds of approximately $13.7 million to be received this month leading to a significant improvement in the Company’s net current liability position by year end.
Ronald Bain, CFO of Eland, commented:
“The significant headroom on what is a conservative 18-month facility, based only on three currently producing wells, shows the quality of the OML 40 asset and its expected future cash flows. The Company plans to refinance this loan in 2018 into a longer-term facility based on Opuama’s full production potential and future OML 40 development.
“The Company’s current cash position combined with cash inflows and the newly syndicated facility means we have a strong financial position from which to execute our near-term work programme.”
Source: Press Release