Tullow Oil PLC passes latest debt test

() passed an important debt test and had its reverses based debt facilities signed off by its lenders.

The company, in a stock market statement, told investors that its lending syndicate has confirmed debt capacity of US$1.8bn in the bi-annual review. Tullow noted that it retains US$500mln of liquidity headroom and free cash at the start of the fourth quarter.

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The next review of the RBL facilities will take place in January.

“The passing of the second debt re-determination this year is encouraging,” Davy analyst Job Langbroek said in a note.

“It removes an element of uncertainty and allows Tullow to continue to focus on adapting to the current low oil price environment.”

Tullow also announced it would be holding a Capital Markets Day (CMD) on November 25.

Langbroek noted that this year’s CMD will be more important because it will use to the event to communicate how the company can realise value from its asset base and also how it intends to de-leverage.