London-based independent oil & gas company Chrysaor Holdings has secured a $1.5 billion loan facility, which will be used to finance the previously announced deal to buy a package of Shell’s UK North Sea assets for a price of $3 billion.
Chrysaor said on Thursday it has completed the syndication of its Reserves Based Loan facility (RBL Facility), which is a senior secured six-year $1.5 billion facility to be used to finance the acquisition of a package of UK assets from Shell announced at the end of January.
According to the London-based player, the facility, one of the largest UK North Sea RBL financings ever, has been agreed on attractive terms including a further accordion facility of $0.5billion.
The RBL Facility was fully underwritten and syndicated by BMO Capital Markets, BNP Paribas, Citi, DNB and ING. A further twelve global financial institutions have joined the RBL Facility during the syndication process, which was significantly oversubscribed.
Phil Kirk, Chief Executive of Chrysaor, said: “We are delighted to have completed the syndication of our RBL Facility. I am pleased to have seen strong support from a number of leading UK and international banks as demonstrated by the significant level of oversubscription.
“Given difficult sector and financial market conditions over the past two years, the success of the syndication is an endorsement of the quality of the team and asset base being put together by Chrysaor and our equity backers.”
Shell agreed to sell the package of its North Sea assets as part of its strategy to reduce debt after buying BG Group.
The package consists of interests in Beryl, Bressay, Buzzard, Elgin-Franklin, Erskine, Everest, the Greater Armada cluster, J Block, Lomond, plus a 10% stake in Schiehallion. The assets being acquired produced 115,000 barrels of oil equivalent per day (boepd) in 2016.
The transaction is expected to complete in the second half of 2017. On completion of the acquisition, Chrysaor will become one of the largest producers of oil and gas in the UK.