Dallas's Kosmos Energy Pushes Its $1.2 Billion Credit Line Out to 2033
The deepwater producer extended its reserve-based facility by more than three years, cut its borrowing margin, and says the deal was oversubscribed. Its next focus, by its own account, is the maturities still left near-term.
Kosmos Energy, the deepwater oil and gas producer headquartered in Dallas, announced Monday that it has completed the amendment and extension of its reserve-based lending facility — the credit line secured against its production assets in Ghana. The amended facility keeps its size and total commitments at $1.2 billion, with $750 million drawn at close, and stretches the final maturity from December 2029 to April 2033, a tenor of about six and a half years. The facility's size begins to amortize after three years, and on the current drawn amount the scheduled repayments would commence in 2031.
The pricing moved in the company's favor as well: the initial rate is the Secured Overnight Financing Rate plus 4.5 percent for the first three years, a reduction of 0.25 percent from the current margin, and the company says the facility was oversubscribed, with a lending syndicate of international banks most of whom have been part of its banking group for over a decade. 'The successful completion of our RBL amendment and extension represents another significant milestone in the execution of our financing strategy,' Chief Financial Officer Neal Shah said in the release. 'The transaction extends a key source of liquidity out to 2033, improving our maturity profile and further strengthening our financial flexibility.'
Kosmos produces offshore Ghana, Mauritania and Senegal and in the Gulf of America, and it framed Monday's deal as one step in a sequence rather than the end of one: following the transaction, the company says, 'our focus remains on continuing to reduce leverage, enhance liquidity and address our remaining near-term maturities.' For Dallas, the announcement is a reminder of the city's quiet second energy economy — not the shale patch, but the headquarters work of financing deepwater production on three coasts of the Atlantic, done from an office tower in Texas. The numbers in this story are the company's own, from its Monday release; what they are worth will be repriced by the market when trading opens.
