CALGARY, ALBERTA–(Marketwired – May 17, 2016) – Trilogy Energy Corp. (“Trilogy” or “the Company“) (TSX:TET) is pleased to announce that following its semi-annual borrowing base review, certain amendments to the Company’s existing credit facility agreement with its syndicated group of lenders have been agreed to, including the following:
- The borrowing base has been re-determined at $300 Million;
- The maturity date has been extended from April 30, 2017 to April 30, 2018;
- The calculation of the consolidated debt to EBITDA covenant has been suspended until June 30, 2017, at which time the covenant will be 6.75:1, scaling down quarterly to 4.0:1 at December 31, 2018;
- The senior debt to EBITDA covenant has been increased to:
- 3.5 for fiscal quarters ending March 31, 2016 and June 30, 2016;
- 4.5 for fiscal quarters ending September 30, 2016, December 31, 2016 and March 31, 2017;
- 3.75 for fiscal quarters ending June 2017, September 2017 and December 2017; and
- 3.25 for fiscal quarters ending March 31, 2018 and thereafter;
- An increase in pricing for all borrowings in excess of $250 Million.
As at March 31, 2016, Trilogy is drawn, inclusive of its working capital deficit and outstanding letters of credit, $264 Million under its bank credit facility. Based on Trilogy’s current assumptions regarding commodity prices for crude oil, natural gas and related products for the balance of 2016 and forecast production levels, Trilogy intends to incur capital and other expenditures that are, in total, less than pro forma funds flow from operations and expects to continue to pay down its debt over the balance of the year.
About Trilogy
Trilogy is a growing petroleum and natural gas-focused Canadian energy corporation that actively develops, produces and sells natural gas, crude oil and natural gas liquids. Trilogy’s geographically concentrated assets are primarily high working interest properties that provide abundant low-risk infill drilling opportunities and good access to infrastructure and processing facilities, many of which are operated and controlled by Trilogy. Trilogy’s common shares are listed on the Toronto Stock Exchange under the symbol “TET”.
Non-GAAP Measures
Certain measures used in this document, including “consolidated debt”, “Adjusted EBITDA”, “funds flow from operations” and “senior debt” do not have any standardized meaning as prescribed by IFRS and previous GAAP and, therefore are considered Non-GAAP measures. Non-GAAP measures are commonly used in the oil and gas industry and by Trilogy to provide shareholders and potential investors with additional information regarding the Company’s liquidity and its ability to generate funds to finance its operations. However, given their lack of standardized meaning, such measurements are unlikely to be comparable to similar measures presented by other issuers.
“Consolidated debt” generally includes all long-term debt plus any issued and undrawn letters of credit, less any cash held.
“EBITDA” is defined as “Adjusted EBITDA” in the Company’s financial statements and refers to “funds flow from operations” plus cash interest and tax expenses and certain other items that do not appear individually in the line items of the Company’s financial statements.
“Funds flow from operations” refers to the cash flow from operating activities before net changes in operating working capital as shown in the Company’s consolidated statements of cash flows. Management utilizes funds flow from operations as a key measure to assess the ability of the Company to finance dividends, operating activities, capital expenditures and debt repayments.
“Senior debt” is generally defined as “consolidated debt” but excluding any indebtedness under the Company’s senior unsecured notes.