Tullow Oil Plc announced today that its lending banks have decided to maintain the firm’s available credit capacity at $3.7 billion following a routine half-annual reserve-based lend redetermination process.
[contextly_sidebar id=”Pf7tStxNtw65auBdKYOQuXWxNe18yOJD”]The banks’ decision was welcomed by Tullow, which has suffered from the plunge in oil prices over the past year.
“Today’s announcement demonstrates the robustness of Tullow’s debt capital structure and emphasises the strong support that we are receiving from our relationship banks,” chief financial officer Ian Springett said.
The company noted that as of September 30, it has cash and undrawn credit amounting to $2.1 billion, with no near-term maturities.
“We are fully funded to meet all of our commitments including the ongoing investment in the TEN development. This important project remains on schedule and on budget to deliver first oil and significant additional cash flow in mid-2016.”
Tullow’s share price had surged 9.64 percent to 185.40p, adding to the upside since Monday, when the company’s stock plunged to a 10-year low.
The Africa-focused oil explorer added a little over seven percent on Tuesday and Wednesday, as Macquarie predicted that banks will indeed support Tullow’s cash needs.
However, despite the rebound, Tullow shares are still more than 70 percent in the red on an annual basis, amid the depressed oil price.
The weak commodity market prompted the company to slash capex and suspend its dividend, as its H1 gross profit halved.