Oil Search Limited Completes Refinancing of US$292.5M Bridging Facility

Strategic Insights -

Oil Search Limited has successfully completed the refinancing of its US$292.5 million bridging facility with a term loan facility agreement for US$245 million. The remaining balance of US$47.5 million will be rolled over pending the receipt of divestment proceeds from the company's planned asset sales, including the sale of interest in the Hides gas field. The new term loan is a five-year amortizing loan secured on future oil revenues and offshore bank accounts, with the principal purpose of repaying bridging finance and providing a long-term base for the full field development of Central Moran and other corporate activities.

Key Takeaways:

  • Oil Search Limited has completed the refinancing of its US$292.5 million bridging facility with a term loan facility agreement for US$245 million.
  • The remaining balance of US$47.5 million will be rolled over pending the receipt of divestment proceeds from the company's planned asset sales.
  • The term loan is a five-year amortizing loan secured on future oil revenues and offshore bank accounts.
  • The principal purpose of the loan is to repay bridging finance and provide a long-term base for the full field development of Central Moran and other corporate activities.
  • Oil Search has put in place an extensive hedging program covering 8 million barrels of oil, utilizing both fixed price swaps and zero-cost collars.
  • A pool of Political Risk Insurance has been arranged through Marsh & McLennan with Lloyd's of London for participating banks.
  • The facility will not compromise Oil Search's ability to raise further funds for the PNG to Queensland Gas Project.
  • Chairman Trevor Kennedy stated that the terms achieved demonstrate a vote of confidence in the company's management, assets, and Papua New Guinea.

Statistics:

  • US$292.5 million: the initial bridging facility.
  • US$245 million: the term loan facility agreement for refinancing.
  • US$47.5 million: the remaining balance rolled over pending divestment proceeds.
  • 8 million barrels: the amount of oil covered by the hedging program.
  • 5 years: the term of the term loan facility agreement.
  • July 1999 to June 2001: the period covered by the hedging program.
  • US$14.60 per barrel: the average fixed price of oil under the hedging program.
  • US$13.40 to US$15.12 per barrel: the average spread of oil prices under the hedging program.

Sources:

  • Oil Search Limited (ASX:OSH)
  • ASX release dated February 1, 1999
  • Statement by Oil Search Limited, dated February 1, 1999
  • Asia Pulse Pte Ltd, "Oil Search Limited Completes Refinancing of US$292.5M Bridging Facility"
  • COMTEX, "Oil Search Limited Completes Refinancing of US$292.5M Bridging Facility"