CALGARY, AB, July 27, 2020 /CNW/ – Highwood Oil Company Ltd. (TSXV: HOCL) (“Highwood” or the “Company“) announces revisions to the Company’s reserve-based credit facility (the “Credit Facility”).
Credit Facility Redetermination
The Company, together with its sole lender, has completed the redetermination of its Credit Facility. The Company’s Credit Facility has been confirmed at $38 million, with the earliest revolving period extended to September 30, 2020 and the term period amended to May 30, 2021. Should oil pricing improve the Company would aim to extend the revolving periods prior to the next renewal date.
Highwood anticipates the Credit Facility will provide sufficient liquidity to execute on its second half 2020 business plan having spent $4.2 million in capital through March 31, 2020.
The Company has agreed to a hedging program locking-in forward pricing on 800 bbls/d for a period of one year within sixty days of entering the Credit Facility. The next renewal is set for on or before November 30, 2020.
Highwood has begun the application process to access some of the available credit guarantee programs provided by the Export Development Bank of Canada (“EDC”) specific to the oil and gas industry.
Amidst the reality of the current oil price environment, the Company has continued to try and reduce corporate overhead and field expenses. Corporate overhead improvements have been realized through the reduction of full-time staff, application of government grants including the Canada Emergency Wage Subsidy (“CEWS”) and reduction of salaries. The Company has provided a re-organization of field personnel and contractors amongst other operating expense initiatives in order to lower field level costs.
The Company continues to bring on production previously shut-in as a result of the global oil price collapse. Total net Company production today is 1,400 bbl/d of oil.