Faroe increases credit facility by $100M to underpin growth plans

UK-based independent oil and gas company Faroe Petroleum has increased its Reserve Based Lending (RBL) bank credit facility by $100 million and extended its duration by two years.

Faroe said on Monday that this increased and extended RBL will provide additional financial capacity to underpin the company’s growth plans.

The company’s $250 million RBL, announced in December 2016, had a further $100 million available on an uncommitted “accordion” basis. All of the banks in the RBL have agreed to Faroe’s exercise of this accordion and so the committed amount has now increased to $350 million.

In addition, the maturity of the RBL has been extended by two years to December 2025, thereby restoring the original seven-year maturity.

The banks in the RBL remain as BNP Paribas (Agent), BMO Capital Markets, Commonwealth Bank of Australia, Danske Bank, DNB Bank, ING, Royal Bank of Scotland, SEB, SR-Bank and Wells Fargo.

Graham Stewart, Chief Executive of Faroe Petroleum commented: “We are pleased with the ongoing strong support from our relationship banks. The decision to increase and extend their commitments to Faroe is reflective of their confidence in our business. The RBL is now fully fit-for-purpose and can support the group’s strategic aims and continuing growth.

“We are targeting a material increase in shareholder value and cashflow with our fully funded investment program across the portfolio, encompassing exploration, appraisal, development and production. I remain confident in our ability to deliver our stated near to medium term production growth target of 35,000 boepd from the group’s existing asset base.”

In recent news, Faroe earlier in October started drilling the Rungne exploration well in the Norwegian sector of the North Sea.

The Rungne prospect is located 30 kilometers north-west of Faroe Petroleum’s Brasse field and immediately north of the producing Oseberg oil field. The unrisked gross resources targeted at Rungne are c. 70 mmboe.