Eland Oil & Gas on Plc on friday confirmed the refinancing of its reserve-based lending facility.
A new US$75mln facility has a five year maturity and it initially carries interest at LIBOR plus 7.5%.
The new RBL facility, provided by Standard Bank and Mauritius Commercial Bank, has the potential to be expanded up to a maximum of US$200mln, subject to incremental increases in reserves and production.
It has presently has an initial borrowing base of US$103mln based on five existing wells (Opuama 1, 3, 7, 8, 9), the anticipated upside of the Opuama-10 and Opuama-11 wells will be included in the next borrowing base review.
Eland said it is also seeking to syndicate a further US$25 million to a third lender in the near-term.
The company presently has a US$30mln cash balance and US$27mln in undrawn debt facilities.
“The substantial increase in our RBL facility reflects Eland’s strong operational delivery over the last few years and represents an endorsement of the quality and potential of our assets,” said George Maxwell, Eland chief executive.
“The funds, together with our current cash reserves and strong operating cashflow, ensures that we can continue our significant investment programme across OML 40.”
“Our investment to date has driven net production from zero to over 13,500 bopd and yielded great benefits to all stakeholders in the licence area.”
Maxwell added: “With this new facility we are now fully funded to ensure that OML40, with investment and operational discipline, delivers the next phase of production growth.
“Drilling in Gbetiokun has begun for the first time in over 35 years and we are extremely excited as it becomes a material contributor to our ongoing production growth.”