Kirk Lovegrove acted as financial adviser to Serica Energy Plc on their new US$525 million 6-year secured Reserves Based Lending (“RBL”) facility. The new RBL facility replaces Serica’s existing RBL and Junior facilities.

The new RBL facility replaces Serica’s existing RBL and Junior facilities. The existing RBL facility has US$271 million drawn and will be fully repaid upon completion of the new RBL facility, which is expected to occur in January 2024. The Junior facility remains undrawn.

Facility Highlights

• Significantly increased liquidity to support future acquisitions and investments.
• Option of potentially doubling RBL facility to over US$1 billion through an accordion(1) feature.
• Debt maturity deferred by more than two years to end 2029.
• Establishes new relationships with a syndicate of leading international banks.
• Simplified financing arrangement with single facility.

Description of new RBL facility

• US$525 million revolving credit facility available in multiple currencies. Serica’s existing RBL facility is in amortisation phase with capacity falling to US$330 million at the end of 2023.
• Maturity date of 31 December 2029 with amortisation commencing on 31 December 2026. Serica’s existing RBL facility matures on 30 June 2027.
• Additional uncommitted accordion option of a further US$525 million increasing the potential total facility to US$1,050 million.
• $100 million sub limit which can be utilised to issue Letters of Credit without the need for cash security.
• The Borrowing Base Assets comprise all of Serica’s interests in producing fields except the Rhum field.
• Available amount under the facility is subject to semi-annual redeterminations.
• If 50% or more of the amount available is drawn, the minimum commodities hedging requirement is equal to 50% of forecast production from the Borrowing Base Assets in year one and 30% in year two. The hedging requirement is halved if less than 50% of the amount available is drawn.

(1) Uncommitted accordion feature provides option for additional financing of up to US$525 million which can be exercised within thirty-six months of the facility signing date, subject to certain conditions.

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