Serica Energy (LON: SQZ) has bolstered its “financial firepower” after securing a loan deal worth $525m over six years.
The reserves-based lending facility (RBL) means increased liquidity for “future acquisitions and investments” and achieved amid a “challenging market amid upstream financing”.
It matures on December 31, 2029.
It replaces an existing RNL facility which has $271m drawn and will be fully repaid upon completion of the new RBL facility, expected in January 2024.
Serica said it means its debts are deferred by more than two years, to the end of 2029, and establishes new relationships with international banks.
The deal also includes an option of a further $525m, increasing the potential to more than $1bn.
DNB, ING Bank N.V, Nedbank CIB, Natixis and ICBC Standard Bank are the banks involved.
Serica Energy CEO Mitch Flegg said: “I am very pleased to announce the signing of a new RBL facility which substantially enhances Serica’s financial firepower. This has been achieved in a challenging market for upstream financing.
“The standing of the international banks in the lending syndicate reflects the quality of Serica’s asset portfolio, strong balance sheet and ambitions for further growth. The new facility, combined with our existing attributes, means that Serica can approach acquisition and investment opportunities from a position of considerable strength.”
An RBL is a type of financing for independent oil and gas players based on the cash flows expected from their assets.
Serica Energy’s debt stood at £210m as of June 30, 2023.
Earlier this year the North Sea operator acquired fellow firm Tailwind Energy, providing Serica with the Triton hub and opportunities for expansion.
Serica has said it is exploring other deals, including those outside of the UK due to the impact of the Energy Profits Levy (EPL).
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