Premier Oil announces a proposed refinancing, with agreement of representatives of its private lenders to a long-form term sheet, subject to credit approvals.
Premier further announced the agreement of revised key terms between it and representatives of its convertible bondholders, subject to agreement by the private lenders.
The company also proposed amended terms to its retail bonds.
Premier said the refinancing would provide a solid foundation for the company to deliver its strategic plans through preserving the group’s debt facilities, resetting financial covenant headroom and extending its debt maturities to 2021 and beyond.
“In return, the lenders will receive a revised security and covenant package, enhanced economics and certain governance controls,” Premier said in a statement.
“The long-form term sheet will now be circulated to the lenders under the company’s RCF, term loan, Schuldschein and US Private Placement notes (Private Lenders) for formal credit committee approval, with lock-up agreements requested by the end of February.
“Revised financing documentation will now be finalised with completion of the refinancing currently anticipated by the end of May 2017.”
Premier said its year-to-date production had averaged about 80 kboepd.
“A significant step up in production is expected once Catcher is on-stream later this year, materially enhancing the Group’s cash flows,” it said.
“The Group will prioritise these cash flows towards reducing its absolute debt levels and leverage ratio to 3x EBITDA.
“At the same time, Premier and its lenders envisage that the Group will selectively seek to invest in its unsanctioned projects, at the appropriate equity levels, with due regard to the commodity price environment.”
With rising production and 700 mmboe of discovered but undeveloped reserves and resources, the company had considerable portfolio optionality.
“Unsanctioned projects include infill drilling programmes, incremental developments and new projects such as Tolmount, Tuna and Sea Lion. Premier also has the potential for material value creation through its exploration acreage, including in Mexico, with drilling expected to commence in Q2.”
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