Tullow Oil refinances debt due for repayment

Tullow Oil has successfully refinanced a large element of debt originally due for repayment this year.

The exploration company founded in Ireland announced yesterday that it has refinanced a $500m (€364m) corporate revolving credit facility; increasing the size of the loan to $750m and extending its maturity from November of this year to April 2017.

“We have taken advantage of currently strong debt markets to increase our bank commitments, further diversify our sources of funding and extend the maturity of our debt,” said Tullow’s chief financial officer, Ian Springett, who added that as the company also benefits from strong cash flow from production, it is well-financed with strong liquidity and considerablefinancial flexibility.

“This latest re-financing provides additional flexibility for Tullow not just in terms of funding developments, such as the TEN project offshore Ghana, but with respect to the timing of disposals in the North Sea and a planned farm-down of TEN,” added Gerry Hennigan of Goodbody Stockbrokers in a research note posted yesterday.

Tullow’s refinancing comes less than a week after UBS upgraded the stock from a “neutral” rating to “buy”, based on its highly rated prospects in Kenya and Mauritania.

Elsewhere, Dublin-based exploration firm Petroceltic International said yesterday that it has abandoned plans for further testing in the second of two targets it had identified on one of its main assets in the Kurdistan Region of Iraq.

Following drilling at the Shakrok-1 well Petroceltic has said, after finding gas at below-commercial levels, a decision has been taken to plug and abandon the target.