Herbert Smith has advised the lenders on three major oil and gas financings in June. The deals, with a combined value of over US$3 billion, demonstrate both the strength of the reserve based lending sector and Herbert Smith’s market-leading position within it. Head of energy finance Jason Fox was the lead partner for all three transactions.
Lundin Petroleum
Herbert Smith advised a group of 27 lenders on a US$2.5 billion secured loan and letter of credit facility for Lundin Petroleum. The transaction, the landmark deal of the year in the upstream financing space, was coordinated by HSBC as documentation bank and BNP Paribas as facility agent and security trustee, along with 15 other lead arrangers.
The facility is available to 10 different borrowers within the Lundin group and sized on the basis of their assets in Indonesia, Norway, Sweden and France.
Senior associates Olivia Caddy and Thomas Bethel and associate Suchita Ramanathan were all part of the Herbert Smith team in London, with Paris support being led by finance partner Jacques Bertran de Balanda and associate Jihene Choyakh.
William Stevens, Global Head of Upstream Oil and Gas Structuring and Financing at HSBC commented:
“Herbert Smith remain the clear market leaders for reserve-based lending work. They put together a great team for this transaction and delivered superb documentation and client service under significant pressure. Their involvement in an upstream deal on the lender side is always a real stamp of quality and was a very significant element in our being able to deliver this deal for Lundin.”
Lundin were advised by Ashurst LLP (English and French law), Arntzen de Besche (Norwegian law), Pels Rijcken & Droogleever Fortuijn (Dutch law) and Pels Rijcken & Droogleever Fortuijn (Swedish law). In addition to Herbert Smith, providing English and French advice, the lenders were advised by Wikborg Rein (Norwegian law), Stibbe (Dutch law) and Advokatfirman Delphi (Swedish law).
Ithaca Energy
Ithaca Energy is an oil and gas exploration, development and production company active in the United Kingdom’s Continental Shelf. Herbert Smith advised BNP Paribas as lead arranger on its US$400 million senior secured borrowing base facility.
Associate Heather Woodward assisted Jason Fox in advising on this transaction along with associates Magdalena Tekely and Ratiba Deramchia and partner Eric Fiszelson from the Paris office.
Herbert Smith has a long history of advising the lenders on financings to Ithaca Energy having advised on Ithaca Energy’s previous financing arranged by Lloyds Banking Group and its bank debt financing prior to that arranged by Royal Bank of Scotland plc.
In addition to Herbert Smith providing English and French advice, Dundas & Wilson LLP, Appleby and Blakes, Cassels & Graydon LLP respectively provided Scottish, Bermuda and Canadian advice to BNP Paribas. Pinsent Masons LLP advised Ithaca Energy.
Xcite Energy
Earlier this month, Herbert Smith advised a consortium of lenders on a US$155 million secured reserve based credit facility for AIM-listed oil development company Xcite Energy, which will be used to provide funding for the development of the Bentley field in the UK North Sea.
The facility is for a term of five years and will be used to provide a substantial part of the funding required for the Phase 1B development of the Bentley heavy oil field in the UK North Sea.
Alongside Jason, the Herbert Smith team included senior associate Thomas Bethel and associates Steffan Knutson and Lachlan McMurtrie.
Jason Fox commented:
“The reserve based lending market continues to flourish despite difficult market conditions. These recent deals demonstrate the commitment of a significant and growing number of institutions to this sector and their ability to structure transactions ranging from single-field developments to very large multi-jurisdictional facilities. We are delighted to have advised on all of these deals.
“We also look forward to merging with Australian firm Freehills, a top tier energy and finance firms, later this year – a combination that will enhance our already market-leading position in the reserve based lending sector.”
Pinsent Masons LLP advised Xcite Energy and Brodies LLP and Ogier LLP respectively provided Scottish and BVI law advice to the lenders.
