Mate, of course, they will have to re-negotiate the bank loan in all its terms soon: where is the news? It is all written in the AGM presentation and, with two field developments ongoing (Maari and Stanley Gas) and other two in the planning (Ketu/Elevala and Beibu Development phase II) and also some exploration drilling ongoing (Nama-1), who is expecting HZN to repay its debt???? It is clear, they will enhance the HZN debt facility which is based on oil/gas reserves: the current one ($160m) was put on paper in 2012 (!!!) before Beibu development phase I, Maari development programme and all the most recent oil/gas discoveries (Tingu, Ketu, Beibu) - I expect them to be able to double HZN debt facility easily and at better terms (as the HZN asset risk has clearly decreased since 2012...). AND yes, do not worry, I am sure that they will eventually use part of the debt facility (if needed...) to pay back the $80m notes ....that, as I said, could be covered just by the cash expected from the Beibu cost recovery oil (calculated in $90m till 2016) .
"The Group expects to refinance/restructure the existing financing arrangements
within the next 12 months, and it is expected that the greater scale and diversity of
production following completion of the Beibu Gulf Project, combined with current
somewhat benign debt market conditions, will lead to enhanced access to debt
funding on more favourable terms".
HZN Price at posting:
17.0¢ Sentiment: Buy Disclosure: Held
(20min delay)