Tullow secures additional $450m despite lower oil prices

Tullow Oil has raised an additional $450 million of capital from existing lenders, boosting its financial strength despite weak oil prices.

The company, which recently reported a loss of about $2 billion, is in the middle of a major cost-cutting drive in wake of falling revenues.

In a statement, Tullow said an asset portfolio assessment had prompted a $200 million increase in lenders’ commitments, increasing available debt capacity from $3.5 billion to $3.7 billion, despite lower oil prices.

The company said it had also secured an additional $250 million corporate credit facility

As a result, Tullow has around $6.3 billion of currently committed debt facilities with no near term maturities.

Chief financial officer Ian Springett said: "Today's announcement marks another important step in the comprehensive re-setting of our business and financing and demonstrates the resilience of our debt capital structure and the quality of our portfolio to generate significant liquidity, even at low oil prices."

“We have diversified our balance sheet, significantly reduced exploration capital expenditure, restructured the business to generate projected savings of $500 million, suspended the dividend and are also benefiting from our ongoing hedging programme,” he said.

“The strong support we have received from our relationship banks ensures that Tullow is well funded and is an important endorsement of our financial strategy and assets.”