Exploration company Tullow Oil said today it has agreed to a new reserve-based loan of about $1.7 billion with its banks.
This will take its liquidity to roughly $900m, including free cash and available debt.
The oil and gas company has been in talks with creditors, including bond holders to fend off a potential cash crunch due to falling oil demand.
It said the loan was reduced from approximately $1.8 billion based on six months of production and disposal of some assets to Norwegian energy firm Panoro.
Tullow in September had raised the prospect of a potential cash crunch at a debt covenant test in January.
Last month it said lenders agreed to extend talks about a reserve-based loan, which are typically secured against a borrower's oil and gas reserves, to February.
The company said it was confident of reaching an agreement with creditors in the first half of this year to refinance its debt.
Tullow had net debt of $2.4 billion at the end of 2020.
It has revamped its business to focus on squeezing its offshore fields in Ghana and shedding some of its other assets, and in January said it expects operating cash flow to reach $500m in 2021 if oil prices stay above $50 a barrel.
The company, with a market capital of roughly £626m as of its stock's last close, said it expects lenders to review the reserve-based loan in September again.
