Tullow Oil has completed a debt refinancing package that is expected to help put a floor under the oil producer's falling share price.
Tullow announced it had refinanced $2.5bn (£1.9bn) of reserves based lending (RBL) credit facilities, extending final maturity to November 2024.
"Refinancing of the RBL credit facility was a key objective for 2017 and was essential to maintaining new management’s credibility in the market, as well as underlining its new policy of under-promising and over-delivering. For us, this was the last major issue to be resolved in the investment case and we expect the stock to react positively," Mirzai said.
Shares were up less than one per cent at 170.6p at the time of writing.
Al Stanton, an analyst at RBC Europe said the announcement "should help calm investors’ nerves, and put a floor under a share price that has slipped back to 170p".
He said the move should allow Tullow to focus on generating free cash flow and paying down its debt pile, which stood at $3.6bn at the end of October.
Following an international ruling to allow Tullow to resume drilling on a $5bn project off Ghana, the company is aiming to start drilling at the Ten field in early 2018 and to ramp up production from new wells to 80,000 barrels per day (bpd) from the 50,000 bpd currently produced.
"Increasing production on its two operated FPSOs [floating production storage and offloading vessels] in Ghana towards capacity in the medium-term should go a long way in underpinning Tullow’s ability to generate free cash flow in a flat oil price environment," Mirzai said.
Tullow's chief financial officer Les Wood said the success of the refinancing demonstrated the high quality of the company's assets, its ability to generate free cash flow and the strength of its long-standing banking relationships.
"Following this refinancing, we have no material near-term debt maturities and will enter 2018 in a strong financial position," Wood said.