Meanwhile downstream business continues to churn along - Printable Version

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Meanwhile downstream business continues to churn along - algon223 - 07-17-2013

InterOil Enters Into a Combined $350.0 Million Refinery Working Capital Facility

PR Newswire

PORT MORESBY, Papua New Guinea and HOUSTON, July 17, 2013

PORT MORESBY, Papua New Guinea and HOUSTON, July 17, 2013 /PRNewswire/ -- InterOil Corporation (NYSE:IOC) (POMSoX:IOC) announced that IOC and its subsidiaries, EP InterOil and InterOil Limited, have entered into a $350.0 million working capital structured facility arranged by BNP Paribas (BNP), also acting as lead manager, to replace the existing $240.0 million bilateral working capital facility with BNP.

Out of the $350.0 million, $270.0 million will be a syndicated secured working capital facility with the support of five banking partners, namely: BNP, Australia and New Zealand Banking Group Limited (ANZ), Natixis, Intesa Sanpaolo (Intesa), and Bank South Pacific Limited (BSP). In addition, BNP will also be providing an $80.0 million bilateral non-recourse discounting facility.

The secured facility is to support the operational requirements of the Napa Napa Refinery in Papua New Guinea (PNG). It will be secured by InterOil's rights, title and interest in inventory and working capital of the Napa Napa Refinery.

Credit portion of the facility bears interest at LIBOR plus 3.75%. Funding is subject to Bank of Papua New Guinea approval on the granting of PNG security over refinery assets, and other standard closing conditions.

InterOil is pleased to have the support and confidence of longstanding banking partners. Collin Visaggio, InterOil's CFO remarked, "We are delighted to have strengthened our banking relationship with BNP who have led our existing working capital facility since 2004, and broadening our relationships with existing financiers like ANZ, BSP, and new syndicate partners Natixis and Intesa. The financing will assist with the ongoing operational activities of the refinery, which has experienced consistent growth over the past 5 years."

RE: Meanwhile downstream business continues to churn along - jft310 - 07-17-2013

The credit facility appears to be expanding by $110 million . Is this for condensate processing ?????

RE: Meanwhile downstream business continues to churn along - johnwgrant - 07-17-2013

I hope the $80 million non-recourse discounting facility is so that IOC can get back to drilling even if XOM drags their feet...

Drill, baby, drill !!!

RE: Meanwhile downstream business continues to churn along - Tusker - 07-17-2013

'jft310' pid='25831' datel Wrote:The credit facility appears to be expanding by $110 million . Is this for condensate processing ?????

Perhaps the consideration is consistant growth over the next five years.

How delightful.

Now, where did I put my optics spectrum glasses.

Yep....

RE: Meanwhile downstream business continues to churn along - Tree - 07-17-2013

'Tusker' pid='25833' datel Wrote:

'jft310' pid='25831' datel Wrote:The credit facility appears to be expanding by $110 million . Is this for condensate processing ?????

Perhaps the consideration is consistant growth over the next five years.

How delightful.

Now, where did I put my optics spectrum glasses.

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Yep....

Tucker - it looks like signing pens are available after all.........whew!!

palm is happy.

RE: Meanwhile downstream business continues to churn along - Palm - 07-17-2013

As happy as a Palm can be! For more than one reason

RE: Meanwhile downstream business continues to churn along - Tusker - 07-18-2013

'Palm' pid='25836' datel Wrote:

As happy as a Palm can be! For more than one reason

After an long hard look, that is a odd looking pen.

Tucker

RE: Meanwhile downstream business continues to churn along - Palm - 07-18-2013

This loan facility cannot be used to "Drill baby drill". Here is the note from the IOC 1st Q 2013 MD&A:

"BNP Paribas Working Capital Facility (Midstream - Refinery)
This working capital facility is used to finance purchases of crude feedstock for our refinery. In accordance with
the agreement with BNP, the total facility is split into two components, Facility 1 and Facility 2. In October 2012,
the working capital facility agreement with a maximum availability of $240.0 million was amended so that the
facility was made evergreen and the annual renewal requirement removed. As at March 31, 2013, Facility 1 has
a sublimit of $180.0 million and finances the purchases of crude and hydrocarbon products through the issuance
of documentary letters of credit and standby letters of credit, short term advances, advances on merchandise,
freight loans, and has a sublimit of Euro 18.0 million or the USD equivalent for hedging transactions. Facility 2
allows borrowings of up to $60.0 million and can be used for partly cash-secured short term advances and for
discounting of any monetary receivables acceptable to BNP in order to reduce Facility 1 balances. The facility is
secured by sales contracts, purchase contracts, certain cash accounts associated with the refinery, all crude and
refined products of the refinery and trade receivables.
As of March 31, 2013, $70.8 million remained available for use under the facility. The facility bears interest at
LIBOR plus 3.5% on short term advances. The weighted average interest rate under the working capital facility
was 2.61% for the quarter ended March 31, 2013 (compared with 3.01% for the same period of 2012), after
including the reduction in interest due to the deposit amounts (restricted cash) maintained as security."

Assures continued operation of the expanding refinery, but won't turn any drill bits. The Upstream spending these days is very minimal, so cash worries are also pretty minimal and will be less so when the deal(s) are announced.

RE: Meanwhile downstream business continues to churn along - Palm - 07-18-2013

'Tusker' pid='25852' datel Wrote:

'Palm' pid='25836' datel Wrote:

As happy as a Palm can be! For more than one reason

After an long hard look, that is a odd looking pen.

Tucker

Yes Tucker, but she sure seems interested in taking that pen in hand.