On May 22, 2018, the Company terminated an amended term loan agreement the Company had with the International Finance Corporation (the “IFC”) (the “Amended Term Loan Agreement”) by prepaying the outstanding principal and accrued interest. The Company did not incur any termination or prepayment penalties as a result of the termination of the Amended Term Loan Agreement.

The Company entered into the Amended Term Loan Agreement on June 29, 2016 through the execution of a Supplemental Agreement with the IFC, which, among other things, amended and restated the existing loan agreement to convert the $20.0 million revolving portion of the credit facility, to a term loan with $15.0 million outstanding at that date. The Amended Term Loan Agreement was secured by the assets of the Gabon subsidiary, VAALCO Gabon S.A., and was guaranteed by VAALCO as the parent company. The Amended Term Loan Agreement provided for quarterly principal and interest payments on the amounts outstanding, with interest accruing at a rate of LIBOR plus 5.75%.

The Amended Term Loan Agreement also provided for an additional $5.0 million, which could be requested in a single draw, subject to the IFC’s approval, through March 15, 2017. On March 14, 2017, the Company borrowed $4.2 million under this provision of the Amended Term Loan Agreement. The additional borrowings were to be repaid in five quarterly principal installments commencing June 30, 2017, together with interest, which will accrue at LIBOR plus 5.75%.

Interest

Under the terms of the Amended Term Loan Agreement with the IFC, from 2016, through March 14, 2017, commitment fees were equal to 2.3% of the undrawn term loan amount of $5.0 million. There were no further commitment fees owing after March 14, 2017.

The table below shows the components of the “Interest expense” line item of the consolidated statements of operations and the average effective interest rate, excluding commitment fees, on the borrowings: