Tullow's backers increase their financial committments

LONDON (ShareCast) - Exploration outfit Tullow Oil (LSE: TLW.L - news) has been granted access to increased financing to support its activities on more secure terms from lenders. Lenders' commitments under its six-monthly Reserve Based Lend (RBL) have been increased by $200m, while lenders have committed an additional $250m under the company's corporate credit facility, to reach $1bn.

The covenants on both sources of financing were amended to address the risk of potential breaches in case of oil price volatility.

Commenting on the above chief financial officer Ian Springett highlighted the quality of the company's assets, which is what allowed the firm to obtain the above terms.

He highlighted how in parallel to the above Tullow has "restructured the business to generate projected savings of $500m" alongside other measures, such as the company's hedging programme.

"The strong support we have received from our relationship banks ensures that Tullow is well funded and is an important endorsement of our financial strategy and assets," the CFO of the West-Africa- based firm said.