Muscat – Swedish oil company Tethys Oil, through its Oman-based subsidiary Tethys Oil Block 3&4 Ltd, has signed an agreement for a five-year $60mn term loan facility with the UAE’s Abu Dhabi Commercial Bank (ADCB).

The purpose of the amortising term loan facility is to support capital expenditure for Blocks 3 and 4 in Oman, which also acts as the collateral for the loan, Tethys Oil said in a statement.

The company said that the loan from ADCB will comprise a credit facility of up to $60mn with a 12-month availability period and a fixed amortisation schedule commencing nine months after entering the agreement.

‘The primary use of funds is capital expenditure on Blocks 3 and 4 in Oman. The loans drawn under the facility are under current conditions expected to carry a single-digit interest, payable quarterly,’ Tethys Oil said.

As part of the agreement, Tethys Oil also commits to hedging at least 50% of its interest rates and an average of 35% of its oil sales. The loan is subject to customary covenants for this type of facility.

‘The loan facility ensures that Tethys Oil is fully funded and positioned to continue investing across its portfolio of assets in various stages of maturity and provides Tethys Oil’s board of directors additional flexibility and optionality in the group’s ongoing strategic review,’ the company said.

Tethys Oil is an oil exploration and production company focused on onshore areas with known oil discoveries. The company’s core area is Oman, where it holds interests in Blocks 3 and 4, Block 49, Block 56, and Block 58.

As per the company’s latest production update, Tethys Oil’s share of production from Blocks 3 and 4 during the second quarter of 2024, before government take, amounted to 699,575 barrels of oil, corresponding to 7,688 barrels of oil per day.

The net entitlement, Tethys Oil’s share of production after government take, amounted to 363,779 barrels of oil, corresponding to 52% of the total production. A total of 386,951 barrels of oil were sold in the quarter with an achieved oil price of $84.3 per barrel.

Earlier in June, Tethys Oil achieved a significant milestone in its oil exploration and appraisal activities in Oman. The company, through its wholly-owned Oman subsidiary, submitted its first comprehensive Field Development Plan (FDP) for Block 56, Mudawrat Concession, to the Ministry of Energy and Minerals for review and approval. The FDP details the plan to develop and appraise resources in three discovered oil fields, the Al Jumd, Menna, and Sarha fields, covering multiple reservoirs.

According to Tethys Oil, the FDP also includes a roadmap for a continued exploration strategy for Block 56’s additional leads and prospects. Upon the Ministry of Energy and Minerals’ approval, the terms of the Exploration and Production Sharing Agreement for Block 56 will be extended to fulfill the commercial development of the discovered fields in the block.

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