The Oil Search Limited (ASX: OSH) share price is down 1.7% to $7.20 today even though the LNG producer and shipper revealed to the market that it has secured US$300 million in new credit facilities from three separate banks including Japanese outfits Mizuho and Sumitomo Mitsui. A fair amount of the LNG Oil Search exports from its Papua New Guinea operations goes to feed the Japanese appetite for LNG.
The other lender is the Commonwealth Bank of Australia (ASX: CBA) with all three banks agreeing to lend up to US$100 million each in credit facilities with 5-year terms that will expire in December 2023.
The news is relevant because LNG production is a capital intensive business and the business wants to expands its producing LNG trains in both PNG and Alaska. It now has a total of US$1.4 billion in cash and credit facilities to fund its growth plans.
Today, Brent crude oil futures sell at US$60.28 and WTI oil futures sell for US$51.24. The Oil Search share price is linked to oil prices, which in turn are linked to LNG prices.
