Jadestone Energy, an independent oil and gas production company focused on the Asia-Pacific region, has signed a new US$200 million reserves-based lending ('RBL') facility with a group of four, reputable, international banks ('the RBL Banks'). The facility also provides for an uncommitted accordion of US$160 million, subject to incremental availability of bank debt. The RBL facility is expected to close shortly following the satisfaction of outstanding conditions precedent.
The RBL facility has a 4-year tenor and, as usual, is subject to bi-annual redeterminations to determine available debt capacity, which will vary over time depending on several parameters including oil prices, operating performance, hedging, future acquisitions and abandonment estimates. Under current assumptions, borrowing capacity under the RBL facility is constrained prior to the Akatara field being integrated as a producing asset, after which it will increase significantly. Both Jadestone and the RBL Banks can initiate additional redeterminations when appropriate.
The RBL facility pays interest at 450 basis points over the secured overnight financing rate, plus the applicable credit spread. Jadestone will also pay customary arrangement and commitment fees. The facility incorporates standard terms and conditions for RBL facilities, including a parent company financial covenant of maximum total debt of 3.5 times annual EBITDAX.
The RBL facility will first be used to repay the US$50 million Interim Facility, which will be fully drawn on 22 May 2023. The RBL facility will also fund the Company’s operations and capital investment program, particularly the Akatara gas project onshore Indonesia, and can be also used for general corporate purposes.
Paul Blakeley, President and CEO commented:
“We are very pleased to have achieved this milestone financing with four international banks, providing a significant debt facility in support of our strategy as a responsible operator in the Asia-Pacific region. The banks recognise that our strategy fits well within the energy transition and have worked closely with us to ensure we deliver on environmental and operating performance objectives.
This facility forms an important stepping stone as we focus on delivering our key growth objectives including infill drilling in Malaysia and executing the Akatara gas development project. Production from Akatara will bring significant incremental debt capacity when integrated into the RBL facility, and the ramp-up of Akatara’s cash flow is also projected to drive a deleveraging of our balance sheet. While we remain focused on operational performance and delivery of guidance from our producing portfolio, additional acquisitions of producing assets are also on our horizon, in an environment that is increasingly active, and the RBL may support this too.'
Source: Jadestone Energy
