CALGARY, May 21, 2019 /CNW/ – Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra” or the “Company”) today announces that following the annual review of its credit facilities, Bonterra management and Board of Directors have determined, along with the bank syndicate, that amending the credit facilities will better reflect the Company’s current operating needs and strategy. The amended credit facilities are comprised of a $300 million syndicated revolving credit facility (previously $330 million), a $40 million non-syndicated revolving credit facility (previously $50 million) (the “Bank Facility”) and the addition of an accordion feature which allows the Company to obtain future funding of up to $40 million for opportunities outside of normal operations, such as acquisitions, subject to unanimous lender approval (the “Amended Facilities”). The terms of the Amended Facilities provide that the loan is revolving to April 28, 2020, with a maturity date of April 28, 2021, subject to annual review.
Bonterra has prudently set its capital expenditure budget for 2019 with flexibility to adjust spending based on commodity prices. As a result, the Amended Facilities afford the Company with ample liquidity and sufficient financial flexibility to execute on its business plan, which includes directing free funds flow to ongoing debt repayment. Currently, Bonterra is drawn approximately $300 million on the $340 million Bank Facility. Based on the Company’s assumptions regarding commodity prices using current strip pricing, as well as budgeted production levels for the balance of the current year, funds flow is expected to be approximately $110 to $115 million for 2019. Therefore, with capital expenditures currently budgeted for $57 million and annual dividend payments of $4 million, the Company anticipates generating approximately $49 to $54 million of free funds flow for 2019. With strengthening commodity prices and declining debt levels, Bonterra’s sustainability can be further enhanced, enabling the Company to consider increased capital spending levels or possible dividend increases.
The terms of the Amended Facilities are substantially consistent with those governing the previous credit facilities, with enhanced compliance and reporting features related to Alberta Energy Regulator (“AER”) regulations regarding abandonment and reclamation activities and certain restrictions on acquisition and disposition activity to ensure strict conformance with pre-determined liability management ratings.
Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and British Columbia. The Company’s shares are listed on The Toronto Stock Exchange under the symbol “BNE”.