Independent Faroe Petroleum entered agreements with two banking facilities, which will provide substantial finance to underpin the company’s growth plans.
The first, amounting to US$250 million is from the Reserve Base Lending Facility (RBL), which will 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 seven-year final maturity (December 2023), with an amortizing schedule from January 2020 and replaces Faroe’s existing RBL facility which matures on 30 June 2018. The company currently has no loans drawn under the RBL facility.
The second is from the Norway Exploration Financing Facility for nearly $115 million (NOK 1 billion), which 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 31 December 2019.
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.
“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,” Graham Stewart, Faroe chief executive said. “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.”
Earlier this month, Norway’s Petroleum Safety Authority (PSA) granted Faroe Petroleum Norge consent to takeover operatorship from DONG E&P Norge of the Oselvar and Trym fields in the North Sea.
Just a few days prior, Faroe completed the acquisition deal with DONG consisting of five Norwegian North Sea oil and gas fields, which included the Oselvar and Trym fields.
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