UK independent Tullow Oil said Friday it has secured an additional $450 million of capital under its existing credit facility.
A six-monthly Reserve Based Lend (RBL) redetermination process found that the quality of Tullow’s asset portfolio supported a $200 million increase in lenders commitments.
The review process also supported increasing the company’s debt capacity from $3.5 billion to $3.7 billion, despite lower oil prices.
Tullow has arranged an additional $250 million of lenders commitments secured through its corporate credit facility that has been bumped up from $750 million to $1 billion.
The company also agreed to an amendment to its financial covenant on the RBL and corporate facility to “address the risk of any potential covenant breach during a period of oil price volatility and investment in production and development assets in West Africa.”
Tullow now has about $6.3 billion of currently committed debt facilities with no near term maturities.
“The strong support we have received from our relationship banks ensures that Tullow is well funded and is an important endorsement of our financial strategy and assets,” Tullow Oil CFO Ian Springett said.
Last month Tullow suspended its dividend and trimmed its 2015 capital expenditure to $1.9 billion from $2 billion the previous year with a “materially reduced exploration budget.”
The company said in its fourth quarter results that it will perform a review of cost base and efficiencies expected to deliver cash savings of around $500 million over the next three years through cuts in capital expenditure, operating costs and administrative expenses.