CALGARY, Alberta, April 10, 2019 (GLOBE NEWSWIRE) — Prairie Provident Resources Inc. (“Prairie Provident”, “PPR” or the “Company”) is pleased to announce the confirmation of its US$60 million borrowing base under the Company’s senior secured revolving facility (the “Revolving Facility”). PPR has also finalized terms of amending agreements with Prudential Capital Group (“Prudential”) respecting its Revolving Facility and senior subordinated notes (the “Senior Notes”), which relax certain financial covenant thresholds effective for the quarter ending March 31, 2019 through the quarter ending December 31, 2019. Prairie Provident expects that the amended thresholds will provide it with additional financial flexibility and runway to execute its 2019 capital program and deliver long-term growth in reserves, production and cash flow for shareholders.
In light of the impact from widened Canadian crude oil price differentials during the fourth quarter of 2018 on the computation of PPR’s financial covenants for 2019, Prudential agreed to relax certain financial covenant ratios to the levels outlined below.
|Financial Covenant||Revolving Facility Requirement||Senior Note Requirement|
|Total Leverage – adjusted indebtedness to EBITDAX1 for the fiscal quarters ending March 31, June 30, and September 30, 2019.||Cannot Exceed 4.75 to 1.00||Cannot Exceed 5.00 to 1.00|
|For the fiscal quarter ending December 31, 2019.||Cannot Exceed 3.75 to 1.00||Cannot Exceed 4.00 to 1.00|
|Senior Leverage – senior adjusted indebtedness to EBITDAX1 for the fiscal quarters ending March 31, June 30, September 30, and December 31, 2019.||Cannot Exceed 3.25 to 1.00||Cannot Exceed 3.50 to 1.00|
|Current ratio – consolidated current assets2, plus any undrawn capacity under the Revolving Facility, to consolidated current liabilities2 for the fiscal quarters ending March 31, June 30, September 30, and December 31, 2019.||Cannot be less than 0.85 to 1.00||Cannot be less than 0.85 to 1.003|
1 Under the note purchase agreements governing the Revolving Facility and Senior Notes (the “NPAs”), EBITDAX is defined as net earnings before financing charges, foreign exchange gain (loss), E&E expense, income taxes, depreciation, depletion, amortization, other non-cash items of expense and non-recurring items, adjusted for major acquisitions and material dispositions assuming that such transactions had occurred on the first day of the applicable calculation period.
2 Under the NPAs, current assets excludes derivative assets while current liabilities excludes the current portion of long-term debt, decommissioning obligations, derivative liabilities and non-cash liabilities.
3 The current ratio covenant under the NPA for the Senior Notes is unchanged.
ABOUT PRAIRIE PROVIDENT
Prairie Provident is a Calgary-based company engaged in the exploration and development of oil and natural gas properties in Alberta. The Company’s strategy is to grow organically in combination with accretive acquisitions of conventional oil prospects, which can be efficiently developed. Prairie Provident’s operations are primarily focused at the Michichi and Princess areas in Southern Alberta targeting the Banff, the Ellerslie and the Lithic Glauconite formations, along with an established and proven waterflood project at our Evi area in the Peace River Arch. Prairie Provident protects its balance sheet through an active hedging program and manages risk by allocating capital to opportunities offering maximum shareholder returns.