Noreco Closes $1.1B Reserve Based Loan


Oil and gas company Noreco, Denmark's second-largest oil and gas producer, on Wednesday announced the successful closing of its new $1.1 billion Reserve Base Lending facility. The new RBL facility replaces the company's existing $900 million RBL. 

"Effective today, the Facility matures in 2028 with a seven-year term that will amortize from the second half of 2024," Noreco, which is, with partner Total working to redevelop the Tyra offshore field in Denmark, said.

"The margin payable under the Facility remains in line with the borrowing cost of the existing RBL and the facility also includes an Accordion option of up to USD 400 million that may be used to support potential future commercial opportunities," Noreco said.

"Noreco's cash drawings under the existing RBL are USD 751 million, while the Facility has cash drawing capacity of USD 1.0 billion based on the current Borrowing Base," Noreco said, adding that the facility will include KPIs based on emissions intensity and renewable electricity generation that will progressively adjust the margin payable through the life of the Facility.

"The successful completion of our previously announced RBL refinancing is an important milestone for Noreco, ensuring the company continues to have a strong capital structure and remains fully-funded to deliver the Tyra Redevelopment project.  The new, enlarged facility demonstrates the quality, longevity and value of our asset base, while also providing a mechanism to economically incentivize the meeting of our ESG objectives. 

"The existing and new lenders in our RBL bank group have reiterated their long-term view of Noreco, and this confidence in our ability to deliver value for our stakeholders is highly appreciated," said Euan Shirlaw, Chief Financial Officer in Noreco.

Back in November 2020, Noreco said that the start-up of the Total-operated Tyra Redevelopment Project in the Danish Sector of the North Sea was expected in the second quarter of 2023, and not in 2022, citing the impact of the Covid-19 pandemic on the construction schedules.

"Due to COVID-19, local governmental imposed restrictions at the fabrication yards have impacted the schedule of the new Tyra topsides, including through the global supply chain delivering key components for the topsides," Noreco said, at the time, adding that as a  consequence of topside delays, the installation of the four new topsides is rescheduled from 2021 to a 2022 installation-window.

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