Tullow Oil refinances $2.5bn as border dispute resolved

Company now has total headroom including free cash of $900 million

Tullow Oil has completed debt refinancing of $2.5 billion following the resolution of a border dispute between Ghana and the Ivory Coast.

The $2.5 billion of credit facilities are split between a commercial bank facility of $2.4 billion and an international finance corporation facility of $100 million.

The fully committed facilities are revolving with a three-year grace period and final maturity of November 2024.

The refinancing relates to “reserves based lending”, which is an asset based financing technique that is unique to the oil and gas sector. It is secured lending where the collateral is the revenue stream that the borrower has from oil exploitation contracts.


The transaction, which was formally launched in early October following the resolution of the Ghana and the Ivory Coast border dispute, was materially over-subscribed and extends the maturity of the group’s existing reserves based lending credit facilities.

Tullow has also decided to reduce the commitments of its revolving Corporate Credit Facility to $600 million from $800 million, ahead of the scheduled amortisation in January 2018.

The company now has total headroom including free cash of $900 million with no material near-term debt maturities.

Tullow chief financial officer Les Wood said the developments were "a key objective" for 2017.

“We are very pleased to have completed this process in line with stated guidance and ahead of our year-end target,” he said.

“The success of this transaction clearly demonstrates the high quality of the group’s assets, our ability to generate free cash flow and the strength of our long-standing banking relationships.

“Following this refinancing, we have no material near-term debt maturities and will enter 2018 in a strong financial position.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter