FAR Receives Credit Approvals for Sangomar Development

FAR Limited has received final credit aprovals for an underwritten USD 300 million senior secured reserve-based lending (RBL) facility for the Sangomar field development offshore Senegal.

The approvals come after a joint Final Investment Decision for the field development signed by Woodside, as the operator, Cairn and FAR.

FAR RBL facility has been approved by Macquarie Bank, BNP Paribas and Glencore, each to the amount of USD 100 million. The facility is a key part of the funding package to develop FAR’s interest in the Sangomar oil field in Senegal.

The facility has a 7-year term (with 4-year repayment holiday) and is priced at a margin of 7.75% over LIBOR.

Undrawn facility amounts will attract a Commitment Fee of 40% of the margin. The banks’ underwriting is subject to the successful conclusion of pre-placement market soundings.

Over the coming months, FAR will conclude the documentation process for the RBL facility, select its preferred provider of junior debt and conclude the necessary funding for the Sangomar project.

FAR will have raised over USD 400 million in new capital to fund its share of Phase 1 CAPEX for the Sangomar oil development, including a AUD 146 million equity placement and Share Purchase Plan with receipts of AUD 11.18 million.

The placement is due to conclude with settlement of funds scheduled for January 23, 2020 and allotment of shares for January 24, 2020.

FAR’s managing director Cath Norman said, “Reaching agreement for a USD 300m underwritten senior debt facility with three international firms, Macquarie, BNP Paribas and Glencore, is further endorsement and support for Sangomar being a tier one oil development asset.

“FAR looks forward to working with the Government and the partners to support delivery of first oil from this world class project in early 2023 and transforming FAR from an explorer to a material producer on the Australian Stock Exchange (ASX) with peak net production of 13,670 bopd. Furthermore, FAR remains excited by the opportunities to substantially increase field recoveries, monetize the gas resource and grow the field’s overall resource size.

“We fully appreciate the support of our shareholders who have helped us reach this important milestone and continue to believe that de-risking the financing component for the Sangomar project and commencing the execute phase for development is likely to generate significant shareholder value.”