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Tullow completes reserve based lend, scales down capital commitments

Total has come under fire from NGOs over the company's conduct in Uganda and Tanzania, ahead of a French legal hearing on the duty of vigilance.

Tullow Oil said it has successfully completed the six-monthly redetermination of its Reserve Based Lend (RBL) facility.

The debt capacity generated by the asset based remains in excess of commitments and means the firm has available credit under the RBL of $3.3billion.

The company said it has also secured $345million of new commitments from its existing lenders by exercising and accordion facility in the exisiting RBL.

It will take effect from April next year.

Tullow said the new commitments will largely offset the impact of the scheduled amortisation in April next year.

In a statement the firm said it has the “appropriate headroom” throughout 2017 as it refinances its bank facilities.

Ian Springett, chief financial officer, said:”This successful redetermination and the new RBL accordion commitments underline the support for Tullow from our relationship banks and the quality of our assets and their ability to generate significant liquidity. Over the past three months, Tullow has started production from TEN and confirmed insurance cover for the Jubilee FPSO turret repair and business interruption.

“With capital expenditure now substantially reduced, we are generating free cash flow and starting to deleverage our balance sheet. This provides us with a solid platform to refinance our RBL and Corporate Facility during 2017, enhance our capital structure and enable future growth.”

Tullow also said its capital commitments have reduced substantially following the completion of the TEN project.

The group will be generating free cash flow from its producing assets and can now start paying down its debt.

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