Serica Energy (LON: SQZ) has increased the borrowing base on its up-to $525 million loan facility, increasing it from the previous US$463m to the full amount.
The move marks the completion of the first semi-annual redetermination on the loan, a reserve-based lending (RBL) facility.
The decision reflects increased reserves, together with the programme of hedging recently implemented.
Following this redetermination, and reflecting the previously reported cash and cash equivalents of £301.6m and debt drawings of $231m (£182m) as of 26 June 2024, Serica’s liquidity is now in excess of £500m.
Serica Energy chief financial officer Martin Copeland said: “We are grateful for the support of our bank group in completing our first redetermination under the new RBL.
“Serica’s robust liquidity supports our ability to deliver on the two-pronged strategy of investing in our assets and executing on attractive M&A opportunities.”
The company secured the loan late last year as a way to increase its liquidity for “future acquisitions and investments,” the company stated.
The deal also includes an option of a further $525m, increasing the potential to more than $1bn.
It replaced an existing RNL facility which had $271m drawn, which was fully repaid upon completion of the current RBL facility. This helped extend the company’s debts, pushing them back to the loan’s maturation of December 31, 2029.
The loan was provided by DNB, ING Bank NV, Nedbank CIB, Natixis and ICBC Standard Bank.
An RBL is a type of financing for independent oil and gas players based on the cash flows expected from their assets.
Earlier this year, Serica Energy’s chief executive officer at the time of the loan agreement, Mitch Flegg, announced that he will leave the company after six years.
Current chairman of the board David Latin took on the role of interim CEO until a long-term successor is appointed.
