The Nigerian Independent Eroton Exploration and Production Company Limited has successfully refinanced the facility it took from Guarantee Trust Bank to purchase the 45 per cent of Oil Mining Lease (OML) 18 in the eastern Niger Delta.
Eroton produces around 40,000BOPD from that asset, which it took over as operator in September 2015. The state hydrocarbon company NNPC is 55 per cent Joint Venture partner.
With a final repayment of $398 million, the RBL has been repaid in full and replaced by a new reserves based lending facility with Guarantee Trust Bank (the “GT Bank RBL”) for the same principal amount, with the following notable advantages to the operator of OML 18.
The original RBL had a repayment date in mid-2021, while the GT Bank RBL has a late-2025 repayment date, consequently reducing quarterly repayments and freeing cash flow (in excess of $80 million per year until mid-2021) for further drilling and development.
The debt service reserve account (DSRA) requirement under the GT Bank RBL is reduced to two future quarterly repayments which combined with the lower quarterly repayment amounts means that only approximately $50 million is required in the DSRA compared with more than $100 million previously.
The refinanced interest rate is marginally higher at approximately 11 per cent (versus 10% previously).
