KOSMOS increases loan facilities by US$350m

Kosmos Energy yesterday said that the company has signed definitive documentation to increase its project finance debt facilities by US$350 million, raising the total amount of its debt commitments to US$1.25 billion.

The funds will support Kosmos' share of the Jubilee Field phase-one development, appraisal of additional discoveries, and ongoing exploration activities on the West Cape Three Points Bloc and adjacent Deepwater Tano Bloc offshore Ghana.

The US$350 million of debt adds US$250 million to Kosmos' senior facility for a total of US$1 billion, and US$100 million to the company's junior facility for a total of US$250 million.

The additional amounts include commitments from Standard Chartered Bank, BNP Paribas SA, Societe Generale, Credit Agricole Corporate & Investment Bank, Credit Suisse International, Citibank, N.A., Natixis, HSBC Bank and FirstRand Bank Limited.

"We are pleased that we have expanded our project finance debt facilities. This will ensure Kosmos is fully funded to execute our development and pre-development plans, as well as pursue our aggressive appraisal and exploration programme underway in Ghana," said W. Greg Dunlevy, Kosmos Executive Vice President and Chief Financial Officer said in a statement issued in Accra.

"Additionally, we believe this achievement demonstrates the continuing strong support of the international financial community, including development institutions such as the IFC and AFC, for Kosmos' plans to remain in Ghana. Since Kosmos' founding in 2003, we have raised nearly US$2.3 billion in capital to develop, appraise and explore these assets and build a strong Africa-focused exploration and production enterprise," he said.

"Following Kosmos' recent announcement that the company will remain in Ghana, this funding demonstrates our commitment to further build the value of these world-class petroleum assets," added Brian Maxted, Kosmos’s Chief Operating Officer.
Kosmos Energy cancelled a deal to sell its stakes in the Jubilee oilfield to ExxonMobil, an accord that met fierce resistance from government.

“First production from the Jubilee Field's phase-one development, scheduled for late fourth-quarter 2010, and the recent Owo oil discovery highlight our ongoing development and exploration success. We hope to continue our great track record of finding oil for the people of Ghana and delivering substantial returns to our investors," the company said.

Ghana National Petroleum Corp, the state oil company which opposed the sale to the U.S. major, said it remained keen to up its own holding in a field due to produce first oil later this year and see output rise to 120,000 barrels per day by mid-2011.

Ghana is on track to pump its first barrel of crude in December, and is poised to become one of the world's fastest-growing economies next year after its offshore Jubilee field comes on line.

"In December this year, Ghana will join the league of petroleum producing nations as commercial production begins in the Jubilee Field," he told an oil and gas conference in the capital, Accra. "Ghana cannot see the oil industry as a miracle wand to solve all problems."

He said government was seeking to ensure transparency in the use of oil revenues from Jubilee, which he said holds about 1.6 billion barrels of crude, and to guarantee locals are employed in the sector.

Tullow Oil, operator of the Jubilee Field, said in February output was scheduled to start in November - though the company and government officials have since said output would start by the end of the year.

The field will take four to six months to reach planned output of 120,000 barrels per day - a level it will maintain for three years, Ghana's energy minister told Reuters in an interview last month.

The government has projected oil production will boost GDP growth to 20 percent in 2011, up from around six percent in 2010, making it one of the world's fastest-growing economies.

Source: B&FT