CMS advises senior lenders on Verus Petroleum’s RBL facility to support three acquisitions

CMS has advised a club of 7 commercial banks including Nedbank Limited, London Branch in relation to a reserve based lending (RBL) facility for Verus Petroleum, which has been amended and restated to be used to part fund the completion of Verus’ acquisition of:

• an interest in the Babbage gas field acquired from Premier Oil in December 2018
• CIECO Exploration & Production (UK) in November 2018; and
• an interest in the Alba field acquired from Equinor in November 2018

These deals and other drilling have secured Verus a 12-fold increase in its production – from 1,500 to 18,000 barrels per day - in less than a year.

The lenders under the RBL facility are now Nedbank Limited, DNB Bank ASA, Lloyds Bank plc, BMO Capital Markets, Commonwealth Bank of Australia, Skandinaviska Enskilda Banken AB and Royal Bank of Scotland plc, all of which are internationally recognised in the RBL market. The RBL facility has been increased to $500 million.

Alan Curran, Chief Executive of Verus Petroleum said:

“We are delighted to have completed these transactions which are aligned with our strategy to expand our production base and cash flow through the acquisition of high-quality production assets. Long-term, our aim is to build a full-cycle E&P company of scale. We now have a diversified portfolio of high-value barrels with low lifting costs in predominantly long-life fields with very strong cash generation, giving us the platform to achieve that aim. Our acquisition in the Boa oil field in 2017 announced our arrival; the completion of these three deals – within a matter of months – is a strong show of our resolve to become one of the leading independents in the basin.”

The CMS team was led by London based energy finance partner Nicholas Ross-McCall and included, in Edinburgh, a team led by Jenny Allan and, in Aberdeen, a team led by Norman Wisely and Graeme Clubley.

Nicholas Ross-McCall commented:

“We were delighted to work again with Nedbank and the other 6 lenders to assist Verus through a transformative period in its progression to becoming one of the leading independents in the UKCS. The deals showcased CMS’ market leading oil & gas finance and M&A capabilities.”