Karoon secures $275m loan facility to complete acquisition of Baúna oil field

Australian independent oil and gas firm Karoon Energy, through its wholly-owned subsidiary Karoon Petróleo e Gás Ltda (KPG), has signed a senior secured term loan facility of up to $275m, fully underwritten by ING Bank, Singapore Branch.

Karoon said that it intends to use the facility as part of the funding package for the acquisition of a 100% operating interest in the Baúna oil field in the Santos Basin, offshore Brazil.

The syndicated facility agreement is expected to offer an option to provide additional funding for the tie-in development of the Patola oil discovery, and the option is subject to final lender approval following Patola reserve certification, an approved updated bank model and project sanction.

In addition, the company intends to complete the documentation and regulatory approvals prior to the completion of the Baúna acquisition, which is expected to be completed during the first quarter of the calendar year 2020.

Baúna field acquisition

In June 2019, Karoon executed a binding sale and purchase agreement to acquire a 100% operating interest in the Baúna field for a consideration of $665m.

The Baúnafield contains two producing oil reservoirs, Baúna and Piracaba, where both tied back to the leased floating production,  storage and off-loading facility (FPSO) Cidade  de  Itajai, and the existing undeveloped Patola discovery.

The field is currently producing light sweet crude at a rate of approximately 20Mbopd, and the acquisition would provide material operational and logistical synergies for the potential development of Karoon’s existing southern Santos Basin assets, Neon and Goiá.

Karoon is an international oil and gas exploration company with projects in Australia, Brazil and Peru, and has a core exploration growth strategy, focused on large targets in proven Petroleum Systems.

Karoon managing director Robert Hosking said: “The company has been working very hard over the past three years to acquire a high quality production asset with robust economic returns. Through the acquisition of the Baúna asset Karoon has delivered on its highest strategic priority.

“Baúna will provide Karoon shareholders with  material oil production  (currently approximately 20Mbopd before development workovers) and  a platform for future growth. The  transaction  will  be transformational for Karoon shareholders, providing significant exposure to reserves, resources and high margin oil production”

Source: NS Energy