TIDMSQZ
RNS Number : 0632X
Serica Energy PLC
18 December 2023
Serica Energy plc
("Serica" or the "Company")
New US$525 million 6-year Borrowing Facility
London, 18 December 2023 - Serica Energy plc (AIM: SQZ) is
pleased to announce the signing of a new US$525 million secured
Reserves Based Lending ("RBL") facility.
Mitch Flegg, Chief Executive of Serica, commented:
"I am very pleased to announce the signing of a new RBL facility
which substantially enhances Serica's financial firepower. This has
been achieved in a challenging market for upstream financing. The
standing of the international banks in the lending syndicate
reflects the quality of Serica's asset portfolio, strong balance
sheet and ambitions for further growth. The new facility, combined
with our existing attributes, means that Serica can approach
acquisition and investment opportunities from a position of
considerable strength."
The new RBL facility replaces Serica's existing RBL and Junior
facilities. The existing RBL facility has US$271 million drawn and
will be fully repaid upon completion of the new RBL facility, which
is expected to occur in January 2024. The Junior facility remains
undrawn.
Facility Highlights
-- Significantly increased liquidity to support future acquisitions and investments.
-- Option of potentially doubling RBL facility to over US$1
billion through an accordion[1] feature.
-- Debt maturity deferred by more than two years to end 2029.
-- Establishes new relationships with a syndicate of leading international banks.
-- Simplified financing arrangement with single facility.
Description of new RBL facility
-- US$525 million revolving credit facility available in
multiple currencies. Serica's existing RBL facility is in
amortisation phase with capacity falling to US$330 million at the
end of 2023.
-- Maturity date of 31 December 2029 with amortisation
commencing on 31 December 2026. Serica's existing RBL facility
matures on 30 June 2027.
-- Additional uncommitted accordion option of a further US$525
million increasing the potential total facility to US$1,050
million.
-- $100 million sub limit which can be utilised to issue Letters
of Credit without the need for cash security.
-- The Borrowing Base Assets comprise all of Serica's interests
in producing fields except the Rhum field.
-- Available amount under the facility is subject to semi-annual redeterminations.
-- If 50% or more of the amount available is drawn, the minimum
commodities hedging requirement is equal to 50% of forecast
production from the Borrowing Base Assets in year one and 30% in
year two. The hedging requirement is halved if less than 50% of the
amount available is drawn.
-- Initial interest rate for loan drawings of SOFR[2] plus a
margin of 3.90% per annum. The margin under the existing RBL
facility is 3.10% per annum.
-- Net Debt to Adjusted EBITDAX financial covenant GBP 3.5x, tested semi-annually.
The Structuring & Coordination Banks include DNB (Facility
Agent & Documentation Bank) and ING Bank N.V.. The Bookrunner
Mandated Lead Arrangers include DNB, ING Bank N.V. and Nedbank CIB.
The Mandated Lead Arranger is Natixis, London Branch. The Lead
Arranger is ICBC Standard Bank plc.
The syndicate of banks received legal advice from Bracewell LLP.
Serica received legal advice from Burness Paull LLP.
The financial advisor to Serica was Kirk Lovegrove and Company
Ltd.
Regulatory
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
Enquiries:
+44 (0)20 7390
Serica Energy plc 0230
Mitch Flegg (CEO) / Andy Bell (CFO)
/ Stephen Lambert (VP Legal and External
Relations)
+44 (0)20 7418
Peel Hunt (Nomad & Joint Broker) 8900
Richard Crichton / David McKeown /
Georgia Langoulant
+44 (0)20 7029
Jefferies (Joint Broker) 8000
Sam Barnett / Will Soutar
+44 (0)20 7390
Vigo Consulting (PR Advisor) 0230
Patrick d'Ancona / Finlay Thomson serica@vigoconsulting.com
NOTES TO EDITORS
Serica Energy is a British independent oil and gas exploration
and production company with a portfolio of UKCS assets.
Serica completed the acquisition of the entire issued share
capital of Tailwind Energy Investments Ltd on 23 March 2023.
Following the addition of the Tailwind assets to its portfolio,
Serica has a balance of gas and oil production. The Company is
responsible for about 5% of the natural gas produced in the UK, a
key element in the UK's energy transition.
Serica's producing assets are focused around two main hubs: the
Bruce, Keith and Rhum fields in the UK Northern North Sea, which it
operates, and a mix of operated and non-operated fields tied back
to the Triton FPSO. Serica also has operated interests in the
producing Columbus (UK Central North Sea) and Orlando (UK Northern
North Sea) fields and a non-operated interest in the producing
Erskine field in the UK Central North Sea.
Serica's portfolio of assets includes several organic investment
opportunities which are currently being pursued or are under
consideration.
Further information on the Company can be found at
www.serica-energy.com . The Company's shares are traded on the AIM
market of the London Stock Exchange under the ticker SQZ and the
Company is a designated foreign issuer on the TSX. To receive
Company news releases via email, please subscribe via the Company
website.
[1] Uncommitted accordion feature provides option for additional
financing of up to US$525 million which can be exercised within
thirty-six months of the facility signing date, subject to certain
conditions.
[2] "Secured Overnight Financing Rate" which has replaced
previous customary use of LIBOR.
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END
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