Tap Oil Limited has executed a borrowing base debt facility with BNP Paribas (BNP) for up to US$90 million.
The BNP facility will replace the US$50 million Manora field development facility and the A$20 million corporate facility executed with Commonwealth Bank of Australia (ASX:CBA), as announced on 15 March 2013.
There are no penalties associated with the cancellation of the CBA facilities. The company has said that the BNP facility provides Tap with enhanced liquidity and balance sheet capacity, and a more flexible funding solution to meet its requirements ahead of the start of production from the Manora Oil Development.
It will be used to immediately repay the debt drawn from the CBA corporate facility, as well as to fully fund Manora and for general corporate purposes. The facility is not currently forecast to be fully drawn during its term. The BNP facility has a four year term, however, Tap expects to repay the facility within the first 36 months of commencement of production from the Manora field in the Gulf of Thailand.
The drawdown of the facility is subject to the satisfaction of market standard conditions precedent for a facility of this type, with first draw down expected at the end of April 2014.
Manora Project Update
Mubadala Petroleum, the Operator of the Manora Oil Development, has advised that the load out of the platform topsides has been rescheduled from April/May 2014 to early July 2014 to accommodate lift vessel availability. This additional onshore construction time should allow for the majority of the outstanding construction work to be completed onshore rather than offshore, which is the preferred, lower-risk and more efficient option. Based on the early July 2014 load out schedule, the topsides are now expected to be in place in mid July 2014.
The rig is expected to arrive in mid to late July to drill the two Manora development wells required for first oil production. Depending on the time needed to complete the two development wells, Manora start up is now expected late in the third quarter of 2014.
Tap’s Managing Director/CEO, Troy Hayden said:
“The debt refinancing with BNP provides Tap with greater funding flexibility and capacity, whilst resolving any short-term liquidity requirement. The BNP facility reflects
the stability of expected cash flows from Manora, and will underpin and support the Company through a crucial phase of significant value creation. The Manora project fundamentals continue to be robust with significant future cash flows expected following first production. With the new debt facility, Tap remains fully funded for its share of the Manora development. ”