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11.03.2009 Business & Finance

Tullow Oil reports Ghana find, wins $2bn loan

By Daniel Nonor - Ghanaian Chronicle

UK-based oil explorer Tullow Oil said it had made a significant new discovery offshore Ghana and secured $2 billion in loans to develop its African finds, sending the company's shares up over 9 percent.

Tullow and Ghana partners Anadarko Petroleum and Kosmos Energy said in statements on Monday that their Tweneboa-1 well had yielded the latest in a string of discoveries in the West African country.

“Tullow's success in Ghana continues apace with the Tweneboa discovery,” Richard Griffith, oil analyst at Evolution Securities said in a research note. “Initial results suggest that the P10 reserves could be .. twice the pre-drill estimate.”

Tullow said in a statement that it had secured its financing package for which it would pay an interest rate of up to 3.75 percent over US$ LIBOR on its debt facility. Before the credit crisis, the company paid around 1 percent above LIBOR, executives said at the time.

Investors had been waiting eagerly for confirmation the debt had been secured. Many small and medium-sized oil producers have had difficulties securing debt to fund field developments and some have been forced to put assets up for sale to meet cash needs.

Also on Monday, UK-listed Sterling Energy said it was in talks with lenders about a waiver on debt repayments while it continues in talks about the sale of U.S. assets.

Tullow shares traded up 6.5 percent at 783 pence at 0903 GMT, compared to a 1.1 percent drop in the DJ Stoxx European oil and gas sector index.