Tullow Oil reaches $1.7 bln reserve-based loan agreement with banks (updated)

Panoro Energy ASA

26/02/2021 08:07

(Adds details from statement, background)
    Feb 26 (Reuters) - Tullow Oil Plc  TLW.L  said on Friday it
has agreed to a new reserve-based loan of about $1.7 billion
with its banks, taking its liquidity to roughly $900 million,
including free cash and available debt.
    The oil and gas company, which has been in talks with
creditors, including bond holders to fend off a potential cash
crunch due to falling oil demand, said the loan was reduced from
approximately $1.8 billion based on six months of production and
disposal of some assets to Norwegian energy firm Panoro
 PANN.OL . 
    Tullow in September had raised the prospect of a potential
cash crunch at a debt covenant test in January, and last month
said lenders agreed to extend talks about a reserve-based loan,
which are typically secured against a borrower's oil and gas
reserves, to February.  urn:newsml:reuters.com:*:nL8N2G60Y6 urn:newsml:reuters.com:*:nL1N2K20CK
    The London-listed company said that it was confident of
reaching an agreement with creditors in the first half of this
year to refinance its debt. Tullow had net debt of $2.4 billion
at the end of 2020.  urn:newsml:reuters.com:*:nRSZ4249Qa
    It has revamped its business to focus on squeezing its
offshore fields in Ghana and shedding some of its other assets,
and in January said it expects operating cash flow to reach $500
million in 2021 if oil prices stay above $50 a barrel.
    The company, with a market capital of roughly 626 million
pounds ($872 million) as of its stock's last close, said it
expects lenders to review the reserve-based loan in September
again.
    
    ($1 = 0.7179 pounds)

 (Reporting by Pushkala Aripaka in Bengaluru; Editing by Rashmi
Aich)
 ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile:
+91 852 751 3793 ;))