North Sea exploration firm EnQuest has proposed a complex financial restructuring which it said it agreed with its key stakeholders “following an extensive period of engagement and negotiation.”
EnQuest is a major stakeholder in the massive Kraken field east of Shetland, one of the North Sea’s largest new projects.
EnQuest said all of the elements of the complex restructuring “are inter-conditional, meaning that none of the elements will become effective if any one of them is not delivered.”
EnQuest had roughly $1.7 billion in debt at the end of June.
The complex proposal includes changes to EnQuest’s existing revolving credit facility, amendments to its high yield notes and retail notes, the renewal of the company’s surety bond facilities and the raising of £82 million in a share placing.
EnQuest chairman Jock Lennox said: “We are very pleased to announce today a comprehensive package of measures to place EnQuest on a strong footing to deliver our Kraken development in H1 2017 and ensure that we are well placed to deliver value to our shareholders in the medium term.
“Over the last two years, EnQuest has taken action to implement extensive cost saving programmes to refocus the business for the low oil price environment, including reducing and re-phasing both capital and operating expenditures.
“Simultaneously, EnQuest has been working on a range of other funding and liquidity options, which culminate in the restructuring announced today.
“We have agreed a range of improvements on the terms of our debt facilities and we remain grateful to our RCF lenders for their continuing support.
“We have also reached agreement with approximately 61% of our high yield noteholders on the proposed note amendments.
“The proposed restructuring, which encompasses amendments to EnQuest’s existing RCF facility, amendments to the high yield notes and the retail notes, the renewal of the company’s surety bond facilities and the placing and open offer which is expected to raise £82 million in gross proceeds, will significantly improve the liquidity position of the company so that EnQuest can deliver first oil from the Kraken development in H1 2017 in accordance with management’s projections.”