U.S. oil and gas explorer Kosmos Energy has refinanced the loan facility tied to its reserves, increasing the borrowing capacity to $1.5 billion.
Kosmos said on Tuesday it has refinanced its reserves based lending (RBL) facility, which previously incorporated only the company’s Ghana assets.
It now includes the recently acquired producing assets in Equatorial Guinea as well as allowing the company the future flexibility to include the Greater Tortue development post final investment decision.
To remind, U.S. oil company Hess last October agreed to sell its interests in assets offshore Equatorial Guinea to Kosmos Energy and Trident Energy for a total consideration of $650 million. The deal was closed in late November 2017.
According to Kosmos, the structure of the RBL includes an expansion feature which allows the facility size to be increased up to an additional $500 million in the future, at the company’s election.
In addition to the inclusion of new borrowing base assets, through the refinancing, the borrowing capacity has been increased to $1.5 billion, up from $1.3 billion, and date of maturity has been extended by four years to March 31, 2025. In addition, amortization has been extended by four years to March 31, 2022, and commitment fees have been lowered.
Following the re-financing of the RBL, Kosmos’ total available liquidity increases to approximately $1.3 billion.
Thomas P. Chambers, senior vice president and chief financial officer, said: “We are pleased to have refinanced our RBL facility, increasing our borrowing capacity through the incorporation of our increased reserves and production. The financing, which was oversubscribed, saw strong appetite from both new and existing banks.”
Chambers added: “With the additional RBL capacity and strong liquidity, Kosmos maintains its low leverage and very solid financial position. Proactive management of the company’s balance sheet is a key part of the company’s strategy and enables us to take advantage of attractive organic and inorganic opportunities and grow the company from a position of strength.”