FPM8 Jul 2011 08:27
Faroe Petroleum PLC
New banking facilities secured
8 July 2011
Faroe Petroleum plc ("Faroe Petroleum", the "Company")
New banking facilities secured
Faroe Petroleum, the independent oil and gas company focussing principally on
exploration, appraisal and production opportunities in the Atlantic margin, the
North Sea and Norway, announces the signing of two new banking credit
facilities, which provide substantial additional finance to underpin the
Company's growth plans.
The two facilities are:
* NOK 1 billion (approx. £110 million) Norway Exploration Financing Facility,
of which NOK 500 million (approx. £55 million) is initially committed by the
participating banks, and a further NOK 500 million is available on an
uncommitted "accordion" basis. Faroe Petroleum currently has approximately
20 exploration licences offshore Norway and expects to drill 12 exploration
and appraisal wells in Norway by the end of 2013. This facility is designed
to have the capability of financing the majority of Faroe's exploration and
appraisal costs on the Norwegian Continental Shelf. The facility will
mature on 31 December 2014.
* US$250 million (approx. £156 million) Reserve Base Lending Facility, of
which US$125 million (approx. £78 million) is initially committed by the
banks, and a further US$125 million is available on an uncommitted
"accordion'' basis. This facility is available to finance approved capital
expenditure, operating costs and acquisitions. The facility will mature on
30 June 2016, with an amortising repayment profile from June 2013.
Six participating banks have been selected and brought together as one group to
provide the two facilities pro rata. The participating banks are BNP Paribas
and Lloyds TSB Bank plc, as Mandated Lead Arrangers, together with Commonwealth
Bank of Australia, DnB NOR Bank ASA, Royal Bank of Scotland plc and SEB. BNP
Paribas are also acting as Facility Agent and Security Trustee under both
facilities, with Lloyds TSB Bank plc acting as Technical and Modelling Bank
under the Reserve Base Lending facility.
At 1 July 2011 the Group had cash balances of approximately £84.2m and, together
with the cash flow from its existing producing assets, which now include the
Blane oil field, and the forthcoming production income from the Brage, Njord,
Ringhorne East and Jotun fields in Norway, the Group is well financed.
Commenting on the new facilities, Iain Lanaghan, Finance Director, said:
"We are delighted to have concluded this financing exercise, and to have
received such strong support from our banks, all of whom took part in a
competitive process to participate in these facilities. The new facilities
provide us with substantial new funding to support the growth of t
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