Heritage Oil refinances £330m loan via a Nigerian subsidiary

Suzie Neuwirth
OFFSHORE oil explorer and producer Heritage Oil yesterday announced that it has refinanced a $500m (£330m) loan through its Nigerian subsidiary.

The five-year senior secured debt replaces a bridge loan used to finance the acquisition of a 45 per cent stake in a Nigerian oil field and can be increased up to $600m.

Heritage said that the facility has been arranged on better terms and will provide greater flexibility than the bridge loan.

“The refinancing is good news, but it was widely flagged by the company beforehand, which is why there was not much impact on the share price today,” Tim Hurst-Brown, analyst at Mirabaud Securities, told City A.M.

“The new $500m loan replaces the bridge facility and is secured at the [subsidiary] level, removing the risk of Heritage as guarantor.

“Given Shoreline’s cash flow and reserve base the debt is not huge.”

The FTSE 250-listed firm’s results in May revealed that output at its Nigerian oil field was lower than expected, but an update last month showed that it had overcome production issues. Heritage’s shares closed 0.4 per cent higher at 136.25p.



South Africa-headquartered Standard Bank was appointed the coordinating mandated lead arranger and bookrunner on Heritage Oil’s refinancing transaction and was joined by a syndicate of three Nigerian banks. First City Monument Bank was appointed mandated lead arranger, while Ecobank Nigeria and Fidelity Bank were lead arrangers. From Standard Bank, Don Hultman, head of mining, energy and infrastructure lending, and Lucy Konie, head of loan syndications and sales, led the team from London. Hultman has been involved in structured lending for over 20 years, heading up debt advisory and arranging mandates across the natural resources and infrastructure sectors. He has been very active in upstream oil and gas lending, leading the financing of the divestment process of assets in Nigeria including Seplat, FHN, Neconde and Shoreline, as well as other financings across Africa, including Tullow, Kosmos, Maurel et Prom, Afren, Oando, Sonangol, EGPC and GNPC. Hultman joined Standard Bank from RBS/ABN Amro where he was head of structured loans and advisory for emerging markets. Prior to that, he was a director at the Export-Import Bank of the United States. From Ecobank, Foluke Aboderin led the team. She heads up the firm’s corporate banking in Nigeria. She has 22 years of experience in banking and joined Ecobank in 2007. She previously worked at Citibank South Africa and First City Merchant Bank, which is now First City Monument Bank.