Houston-based energy player Vaalco Energy has entered into a revolving credit facility to provide short-term funding for its planned investment programs over the next few years.
The six-year revolving credit facility with an initial commitment of $190 million can be extended to $300 million. The facility is led by the Isle of Man branch of the Standard Bank of South Africa, with other participating financial partners, including Rand Merchant Bank, the Mauritius Commercial Bank, and Glencore Energy UK.
The new loan replaces the company’s existing undrawn revolving credit facility that was provided by Glencore. It is secured with Vaalco’s assets in Gabon, Egypt and Côte d’Ivoire.
“Closing this new credit facility will supplement our internally generated cash flow and cash balance to assist in funding our robust organic growth projects,” said George Maxwell , Vaalco’s Chief Executive Officer. “With $190 million in initial commitment and the ability to grow to $300 million, this facility enables us to fund any short-term capital funding needs that may occur as we execute the significant growth projects across our assets over the next couple of years.”
According to Vaalco, the new facility is meant to provide short-term funding that may be needed at times to supplement its internally generated cash flow and cash balance to fund its planned investment programs across assets over the next few years.
As explained, the amounts drawn bear an interest which is set to decrease after the the dry dock refurbishment project of the floating production storage and offloading (FPSO) vessel Baobab Ivoirien MV10 operating in Côte d’Ivoire is completed.
The vessel’s upgrade will enable future drilling and development, with Vaalco hoping to resume operations in 2026. This is set to be followed by “significant” development drilling that same year, with expected production increases from the Baobab field in the Baobab CI-40 block, along with potential future development of the Kossipo field on the same license.
Earlier this week, the US player bought a majority stake in the CI-705 block offshore Côte d’Ivoire. In addition to oil, the block is believed to contain gas prospects.