Faroe Petroleum, an oil and gas company focusing principally on Norway and the UK, has signed two banking facilities, which will provide finance for the company’s growth plans and costs for the Norwegian activities.
According to Faroe’s statement on Tuesday, the two facilities are $250 million Reserve Base Lending Facility (RBL) and NOK 1 billion ($114.9M) Norway Exploration Financing Facility.
The first facility is available to finance the relevant assets and approved capital expenditure, operating costs and acquisitions. In addition to the committed $250 million, a further $100 million is available on an uncommitted “accordion” basis. This RBL has a 7-year final maturity, until December 2023, with an amortizing schedule from January 2020 and replaces Faroe’s existing RBL facility which matures on June 30, 2018. The company currently has no loans drawn under the RBL facility.
The second facility has the capability to finance the majority of Faroe’s exploration and appraisal costs on the Norwegian Continental Shelf. In addition to the committed NOK 1 billion, a further NOK 0.5 billion is available on an uncommitted “accordion” basis. The availability period of the facility is to December 31, 2019.
Commenting on the new facilities, Graham Stewart, Chief Executive of Faroe Petroleum said: “We are very pleased to have concluded this financing exercise, and to have received such strong support from both our existing bank syndicate and new lenders. The new facilities provide us with substantial funding to support the continuing growth of the Group and the financing of our development assets.
“The combination of existing cash, these new credit facilities and cash flow from the company’s significantly enhanced portfolio of producing assets, ensures that we are funded to take advantage of the material development upside in our portfolio and continue to invest in our value enhancing exploration program on the Norwegian continental shelf.”
The facilities have been provided by BNP Paribas, BMO Capital Markets, Commonwealth Bank of Australia, Danske Bank, DNB Bank, ING, Royal Bank of Scotland, SEB, SR-Bank and Wells Fargo. Rothschild and Pinsent Masons advised the Company and Watson Farley Williams advised the banks.