VAALCO Announces Five Year, $50 Million RBL Facility Providing Additional Financial Flexibility

Wednesday, May 18, 2022

VAALCO announced entry into a new credit agreement, effective May 16, 2022, for a new five-year Reserve Based Lending (RBL) facility with Glencore Energy UK Ltd. (Glencore) that includes an initial commitment of $50 million and is expandable up to $100 million.

Highlights

Significantly improves financial flexibility providing optionality to achieve accretive growth;
Provides access to cash if required for potential future development programs;
Enhances financial optionality for funding inorganic acquisition opportunities;
Further strengthens financial position;
Forecasted 2022 capital program remains fully funded;
Affords the optionality to accelerate development opportunities at Etame; and
As part of the agreement, Glencore will provide crude oil marketing.
Bolsters VAALCO’s strong, debt-free balance sheet and growing cash position with a low-cost facility;
Facility size is $50 million with ability to expand up to $100 million at LIBOR plus 6%;
Facility matures in 2027;
Key terms and covenants under the new facility include net debt to EBITDAX of less than three times and requires VAALCO to maintain a minimum cash balance of $10 million; and
Secured by Etame assets, demonstrating the strength and quality of VAALCO’s flagship asset.

George Maxwell, VAALCO’s Chief Executive Officer, commented, “We have taken the opportunity to enhance our financial flexibility at a favorable time, with sustained higher pricing, strong cash flow generation and no imminent need to use the new facility. By negotiating the facility at a time of strength, it allowed us the opportunity to obtain a low-cost debt option as compared to our peer group. We continue to forecast all current capital commitments for 2022 related to the drilling program, FSO and field reconfiguration will be covered by cash on hand and cash from operations. This new credit facility provides dry powder for future opportunities and could reduce our overall cost of capital by providing immediate access to funds at a low rate, if required. It enhances our opportunity set and allows us to continue to focus on our strategy to build meaningful size and scale to deliver future accretive growth. We are excited about the future for VAALCO with the continued development of our interests in offshore Gabon, upside opportunities in Equatorial Guinea and the potential to integrate accretive acquisitions aimed at further strengthening VAALCO and growing shareholder value.”

« GO BACK

Petroleum Africa

VAALCO Announces Five Year, $50 Million RBL Facility Providing Additional Financial Flexibility

Petroleum Africa On-The-Go

VAALCO Announces Five Year, $50 Million RBL Facility Providing Additional Financial Flexibility

You may also like

First LNG Realized at the Greater Tortue Ahmeyim Project

United Energy Acquires Western Desert Producer APEX

Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG

ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System

Tullow Highlights 2025 Operational Plans in Ghana

TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years

Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession

Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market

Petroleum Africa On-The-Go