Narrative
Full Description
Project narrative
On June 29, 2012, Shoreline Natural Resources Limited — a special purpose vehicle and joint venture of the UK-listed Heritage Oil Plc and its Nigerian partner Shoreline Power Company Limited — signed a $550 million syndicated bridge loan agreement with JP Morgan (global co-ordinator and joint bookrunner), Canaccord Genuity (lead manager), China Development Bank (mandated lead arranger), Standard Bank Group (mandated lead arranger), Ecobank Nigeria (lead arranger), and First City Monument Bank (lead arranger). China Development Bank reportedly contributed $200 million to the loan syndicate. The loan carried a 12+6 month maturity (final maturity date: December 29, 2013) and it was supported by one or more sources of collateral pledged by Heritage Oil Plc. Its other borrowing terms are unknown. Financial close was achieved on November 1, 2012. The proceeds of the loan were to be used by the borrower to partially finance the acquisition of a 45% stake (participating interest) in the offshore Oil Mining License 130 (OML 130) from Shell Petroleum Development Company of Nigeria, Total E&P Nigeria Limited and Nigeria Agip Oil Company for $850 million. The acquisition included eight producing fields, infrastructure and a section of the Trans Forcados pipeline. On November 9, 2012, Heritage Oil announced that Shoreline Natural Resources Limited had successfully completed the acquisition. Shoreline Natural Resources Limited made principal payments worth $52.5 million on the $550 million bridge loan in May 2013, bringing the total (principal) amount outstanding to $497.5 million. Standard Bank Group later sought to arrange a long-term lending facility for Shoreline Natural Resources Limited that would be secured by (i.e. collateralized against) its interest in OML 30.
Staff comments
1. OML 30 is located onshore in the delta region, covers 1,097 square kilometers and includes eight producing fields with oil and gas contained in numerous stacked reservoirs, and the acquisition Assets include a 45% interest in the segment of the Trans Forcados pipeline between the Eriemu Manifold and the Forcados River Manifold (known as the OML 30 Trans Forcados Pipeline Segment). OML 30, Nigeria, has gross proved and probable reserves of 1,114 mmbbls of oil, estimated by independent technical consultants RPS Energy Consultants Limited ("RPS Energy") and current production of c.35,000 bopd. The economic valuation of proved plus probable reserves is estimated at between US$3,089 million and US$3,789-million. 2. Shoreline Power Company Ltd is a subsidiary of Shoreline Energy International Ltd, and is a private sector power generation company in Nigeria and sub-Saharan Africa. Shoreline Energy International Ltd is a Nigerian holding company operating in Africa with a diversified portfolio in construction, oil & gas, and power & infrastructure. 3. Heritage Oil Plc is an independent upstream exploration and production company, listed on the London Stock and Toronto Exchange and is a member of the London FTSE 250 Index. It has a producing property in Russia and exploration projects in the Kurdistan Region of Iraq, Democratic Republic of Congo, Malta, Pakistan, Tanzania and Mali, and an equity investment in a Libyan oil services company. 4. McCarthy Tétrault LLP acted as English and Canadian counsel to Heritage Oil, as acquiror. 5. After the acquisition, the remaining 55% participating interest in OML 130 was held by the Nigerian Petroleum Development Company, a subsidiary of the Nigerian National Petroleum Corporation. 6. Standard Bank Plc also provided a $50 million letter of credit to Nigerian Petroleum Development Company, to cover the working capital requirements of Shoreline Natural Resources Limited under the joint operating agreement for OML 30. Heritage Oil agreed to provide cash collateral of $51 million to Standard Bank Plc to guarantee this letter of credit, which also covered any interest due under the letter of credit.