Norway: Banks Support Det Norske with USD 500 Million Loan

Banks Support Det Norske with USD 500 Million Loan

Det norske oljeselskap ASA  announced today a fully underwritten, 500 million dollar revolving corporate credit facility*. The facility contains an uncommitted increase feature (accordion) which, if fully utilized, would increase the facility amount by up to a maximum amount of 100 million dollar.

The 500 million dollar tranche (the “Facility Amount”) is co-ordinated by DNB and Nordea and fully underwritten by the Bookrunners and Mandated Lead Arrangers: DNB, Nordea and SEB, subject to an executed loan agreement. The underwriters intend to syndicate the facility to a select group of banks.

The loan agreement is targeted to be completed by no later than 1st March 2012. The Facility matures on 31. December 2015. DNB is documentation agent and facility agent for the facility.

Det norske’s projected available liquidity for field developments, including tax receivables, at year end 2011, is approximately USD 800 million including the Facility Amount.

“We are very pleased to have received such strong support from DNB, Nordea and SEB. The fact that these banks have offered to fully underwrite this facility is a great testimony to the quality of our asset base,Det norske CFO Teitur Poulsen said.

“Earlier this year, Det norske strengthened its equity base by increasing the share capital by approximately 15 percent, through a 10 percent share issue and conversion of convertible bonds.

 This new equity combined with the Facility will underpin the funding of our field developments, with the first three developments being Jette, Atla and Krafla. These developments alone have the potential to generate an annual estimated EBITDA in excess of NOK 2 billion at plateau production and based on current oil prices. Such cash flow generation, combined with the credit availability from the Facility, will also serve as a significant funding source for the larger developments on Draupne and Aldous Major South,” Poulsen said.

In addition to the new Facility, Det norske has an existing exploration credit facility of NOK 3 500 million. The exploration credit facility was recently reduced from NOK 4 500 million to NOK 3 500 million, by the Company’s request. Det norske has also received confirmation from the Oil Taxation Office that it will receive exploration tax refunds of approximately NOK 2 300 million before year end 2011.

*Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Examples of revolving credits used by consumers include credit cards. Corporate revolving credit facilities are typically used to provide liquidity for a company’s day-to-day operations.

Offshore Energy Today Staff, December 21, 2011; Image: Det Norske

 

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