EnQuest improves cash liquidity through two new deals

UK oil and gas company EnQuest will enhance its cash liquidity position by $100 million through two deals announced on Thursday. 

Namely, the oil company has executed a $37.25 million refinancing for its Malaysian Tanjong Baram project as well as an $80 million crude oil prepayment transaction with Mercuria Energy Trading. These two deals will directly provide EnQuest with over $100 million of additional financial resources.

As detailed by EnQuest on Thursday, the company entered into the Tanjong Baram refinancing deal with Castleton Commodities Merchant Asia. The deal is intended to replace the existing $11.35 million financing with the Development Bank of Singapore.

The Tanjong Baram field is located in the Western Baram Delta some six kilometers off the coast of Sarawak. It was discovered in 1995 by drilling the TB-1 exploration well, followed by two appraisal wells.

The development consists of two producing wells, an unmanned wellhead platform, and an eight-kilometer pipeline tie-back to the West Lutong-A platform operated by Petronas. First production was achieved in June 2015.

EnQuest also said on Thursday that it entered into an $80 million crude prepayment agreement with Mercuria Energy Trading. The deal involves repayment in equal monthly installments over 18 months, through the delivery of approximately 1.8 mmbbls of oil.

The company will receive the average Brent price over each month subject to a floor of $45 per barrel and a cap of around $64 per barrel. According to EnQuest, the prepayment transaction is being undertaken on an unsecured basis and at a cost lower than current interest on the oil company’s existing senior credit facility.

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