DEBT |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Debt Disclosure [Abstract] | |
| DEBT | DEBT 2025 RBL Facility The Company’s reserves-based facility agreement (the “2025 Facility Agreement”) provides a senior secured reserve-based revolving credit facility (the “2025 RBL Facility”) that had an initial borrowing base of $182.0 million and initial aggregate commitments of $190.0 million (the “Initial Total Commitments”) with the ability to increase to a maximum aggregate commitments of $300.0 million, subject to the conditions and process set out in the 2025 Facility Agreement. The borrowing base amount is calculated pursuant to the 2025 Facility Agreement and redetermined on March 31 and September 30 of each year beginning June 30, 2025 and in certain circumstances, other interim triggers set out in the 2025 Facility Agreement. The Total Commitments will reduce semi-annually starting with a $13.4 million reduction on March 31, 2027, and a $30.2 million reduction for each of the subsequent semi-annual periods starting on September 30, 2027. During the first quarter of 2026, the Company borrowed an additional $92.0 million under its 2025 RBL Facility. The borrowings accrue interest at a rate based on the Term SOFR plus the Applicable Margin of 6.5% per annum. In addition, the borrowings are due to be repaid within one month from the drawdown date with, subject to certain conditions, the option to rollover the debt upon maturity. The proceeds were primarily used to fund the Baobab FPSO Renovation (defined below). As of March 31, 2026 and December 31, 2025, the Company had $152.0 million and $60.0 million, respectively, of outstanding borrowings under the 2025 RBL Facility. During the three months ended March 31, 2026 and the year ended December 31, 2025, the weighted-average interest on the 2025 RBL Facility was 10.2% and 10.7%, respectively. Pursuant to the Global Confirmation Deed, dated January 23, 2026 (the “January Global Confirmation Deed”), certain existing Lenders (defined below) under the 2025 RBL Facility agreed to increase their initial commitment effective January 23, 2026 from $190.0 million to $255.0 million. The increase in commitments was undertaken with the existing accordion feature included in the 2025 RBL Facility pursuant to the January Global Confirmation Deed. In addition, as result of the scheduled borrowing base redetermination on March 31, 2026, our borrowing capacity was increased to and capped at the aggregate facility commitment of $255.0 million. As of March 31, 2026, we had $255.0 million of aggregate facility commitments and $103.0 million of available borrowing capacity under the 2025 RBL Facility. Pursuant to the Global Confirmation Deed, dated April 28, 2026 (the “April Global Confirmation Deed”), certain existing Lenders under the 2025 RBL Facility agreed to increase their commitments effective January 23, 2026 resulting in an overall increase in commitments from $255.0 million to $300.0 million. The increase in commitments was undertaken with the existing accordion feature included in the 2025 RBL Facility pursuant to the April Global Confirmation Deed. Each loan under the 2025 RBL Facility will bear interest at a rate equal to Term Secured Overnight Financing Rate (“SOFR”) plus the applicable margin (the “Applicable Margin”) of (i) 6.50%, from the date of the 2025 Facility Agreement until the date on which the renovation and repair of the floating production storage and offloading tanker facility named Baobab FPSO for use in connection with the development of the Baobab field (the “Baobab FPSO Renovation”) meets certain completion tests defined in the 2025 Facility Agreement and (ii) thereafter, 6.00% until the Final Maturity Date (defined below). We shall pay the accrued interest on the last day of each applicable interest period, which interest period may be, at our option, one, three or six months or such other period as agreed between us and the lenders party to the 2025 Facility Agreement (the “Lenders”). The 2025 RBL Facility will mature on the earlier of (i) March 4, 2031, which is the sixth anniversary of the date of the 2025 Facility Agreement and (ii) the Reserve Tail Date (the “Final Maturity Date”). The Reserve Tail Date is the last day of the calculation period immediately preceding the first calculation period in which the aggregate remaining reserves for all of the borrowing base assets are projected in the then current banking case to be less than 25% of the initial approved reserves. The 2025 RBL Facility is secured against certain assets of the Company and the other obligors under the 2025 Facility Agreement. The security package includes security over the shares in the obligors (other than in the Company), hedging agreements, intercompany loans, insurances, offtake agreements relating to the borrowing base assets and project accounts. The 2025 Facility Agreement contains certain financial covenants, including that, beginning on June 30, 2025 and then as of each March 31 and September 30 until the Final Maturity Date, the ratio of Total Net Indebtedness to EBITDAX (each defined in the 2025 Facility Agreement) for the trailing 12 months shall not exceed 3.0x. Additionally, following the Baobab FPSO Renovation completion date, the debt service coverage ratio for the 12 months commencing on the day immediately following each March 31 and September 30 (and any interim redetermination date) until the Final Maturity Date shall be at least 1.2:1. The Company also provides a liquidity forecast for the Company and certain of its subsidiaries which shall demonstrate that the total corporate sources equal or exceed the total corporate uses. The liquidity forecast is delivered quarterly during the Baobab FPSO Renovation period and otherwise on each redetermination of the banking case and any proposed distribution. The Company is required to pay a quarterly commitment fee equal to (i) 35% per annum of the Applicable Margin on the daily amount of the difference (if any) by which the borrowing base amount exceeds the then-outstanding amount of loans, plus (ii) 20% per annum of the Applicable Margin on the daily amount by which the then-total commitments exceeds the higher of the total outstanding amount of loans and the borrowing base amount. The Company is also required to pay customary technical and modelling bank fees, agency fees and security agent fees. The 2025 Facility Agreement also contains customary information covenants as well as affirmative and negative covenants subject to customary threshold and materiality which include, among others, compliance with laws (including environmental laws, sanctions and anti-corruption laws), delivery of quarterly and annual financial statements and compliance certificates, no change of business, no merger and maintenance of corporate existence, field preservations and related contracts relating to the borrowing base assets, maintenance of insurance, entry into certain derivatives contracts which are regulated by the 2025 Facility Agreement and the hedging policy, restrictions on the incurrence of liens, indebtedness, asset dispositions, acquisitions, restricted payments, entry into offtake agreements and other customary covenants. If the aggregate borrowings exceed 35% of the lower of (a) the available total commitments and (b) the applicable borrowing base amount, we are also required to enter into commodity price hedge positions covering certain volumes of anticipated future production set out in the banking case. There are other covenants that make the Company’s ability to pay dividends and to enter into certain acquisitions and disposition transactions subject to certain conditions. These covenants are subject to a number of limitations and exceptions. Additionally, the 2025 Facility Agreement contains customary events of default, including non-payment and borrowing base deficiency, funding shortfall subject to certain liquidity cure rights, breach of financial covenants, misrepresentation, insolvency, changes in ownership or business, litigation, cross default, expropriation of any borrowing base assets, political events, cessation of production and the occurrence of a material adverse effect. The 2025 Facility Agreement also contains events of default related to the failure to complete the Baobab FPSO Renovation by the Baobab FPSO Renovation long stop date determined in the 2025 Facility Agreement and the failure to renew any field license on substantially the same terms three months before the expiration of such field license and if a change of operator occurs. The events of default contain thresholds and remedy periods customary for credit facilities of this nature. If the obligors do not comply with the financial and other covenants relating to non-payment, sanctions, anti-corruption, loans and guarantee or tax in the 2025 Facility Agreement, the Lenders may require immediate payment of all amounts outstanding under the 2025 Facility Agreement and any outstanding unfunded commitments may be terminated. In addition, if any principal amount payable is not paid upon the due date, interest shall accrue on the overdue amount from the due date up to the date of the actual payment at an additional interest rate of 2% per annum, and such interest shall be immediately payable on demand. As of March 31, 2026 and December 31, 2025, we were in compliance with all of our debt covenants. Fair Value Measurement The fair value of the 2025 RBL Facility approximates its respective carrying amount as its interest rate is variable and reflective of market rates. The fair value measurement for the 2025 RBL Facility represents Level 2 inputs.
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