Tullow Oil refinances Norway prospects

Tullow Oil has refinanced its Norwegian exploration prospect with a further $330m (€244m) in funding for its NOK 2 billion (€246m) prospect and it has extended a $500m facility out to 2017 for the NOK 3 billion prospect.

With the new facilities in place Tullow has successfully funded three quarters of the group’s requirements to explore the Norweigian continental shelf.

Tullow Oil’s chief financial officer, Ian Springett, said that with the funding in place the company is in a strong position to continue its Norweigian exploration.

“This NOK 3bn facility provides pre-funding for approximately 75% of our exploration and appraisal investment on the Norwegian Continental Shelf.

“The significant oversubscription demonstrates the strength of our banking relationships and our ability to access debt capital markets.

“We remain in an excellent position to fund all our activities across the portfolio with strong liquidity and considerable financial flexibility,” he said.

The banking arrangements had originally been put in place by Spring Energy before it was acquired by Tullow.

The facility was due to expire at the end ofthis year but has since been renewed with the bonds to renew the facility significantly oversubscribed.

Goodbody Analyst, Gerry Hennigan rated the stock as a buy following the announcement.

In a broker’s note he said: “Tullow Oil announced this morning that it has refinanced its NOK 2bn Norwegian exploration loan facility and has increased it to a total of NOK 3bn.

“The facility, which was due to expire in December 2014, has been extended to the end of 2017.

“The facility provides pre-funding for c.75% of the group’s exploration and appraisal requirements on the Norwegian continental shelf.”