Tullow Oil, an Africa-focused oil producer, has announced that it has reached an agreement for a $400 million five-year debt facility and an oil marketing and offtake deal with Glencore's U.K. oil and gas division.
According to Tullow Oil, the proceeds from the debt facility, combined with its existing cash reserves and an estimated $800 million in free cash flow from 2023 to 2025, will enable the company to address all outstanding 2025 loan notes, including senior notes maturing in March 2025.
CEO Rahul Dhir expressed confidence in the partnership, stating, "Glencore's commitment of a $400 million facility is a strong endorsement of our business plan and strategy."
In addition to the debt facility, Tullow Oil has also entered into oil marketing and offtake contracts with Glencore for its crude oil entitlements from the Jubilee and TEN fields in Ghana, as well as the Rabi Light entitlements in Gabon. These agreements will run simultaneously with the debt facility agreement.
Tullow Oil's recent partnership with Glencore signifies a significant step forward for the company. With the new debt facility and oil marketing deal in place, Tullow Oil is well-positioned to address its outstanding loan notes and optimize its crude oil entitlements from key fields across Africa.
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