Herbert Smith and Allen & Overy (A&O) have advised on the creation of a $2.8bn (£1.9bn) reserve-based lending (RBL) facility for oil and gas company Perenco.

The facility, the largest ever of its kind, will enable the company to grow its business with new acquisitions and develop its current assets.

The new facility, which will initially be capped at $1.8bn (£1.2bn) has been provided by a consortium of banks. Societe Generale, BNP Paribas and Credit Agricole Corporate & Investment Bank were the facility bookrunners, while the lenders included Bank of Scotland, Citibank, ING, Natixis, Standard Chartered, Bank of Tokyo-Mitsubishi UFJ and RBS.

Herbert Smith fielded a team led out of London with energy finance head Jason Fox at the helm.

The team comprised lawyers from the firm's London, Paris and Madrid offices, including Paris energy and infrastructure partners Rebecca Major and Bertrand Montembault, London corporate partner Paul Griffin and Madrid corporate partner Miguel Riano.

A&O advised the banks, with projects partner Andrew Castle leading the magic circle firm's team.

Fox (pictured) said: "This is another landmark for reserve-based lending and demonstrates the flexibility of the product and lenders' increasing willingness to provide funds to high quality, ambitious independents not only for the development of new or existing assets, but also for acquisition opportunities."

RBL involves the collateralisation of a loan by the value of a company's reserves, with the repayment of the debt coming from revenues generated by the investment.

Perenco – which runs onshore and offshore operations in 16 countries including Peru, Gabon and Guatemala – has a longstanding relationship with Herbert Smith. In 2003 a team led by Fox advised BNP Paribas as joint lead arranger on its £235m loan and credit agreement with Perenco.

Herbert Smith on the Legal Week Wiki