CALGARY, AB – Highwood Oil Company Ltd. (“HOCL“, “Highwood” or the “Company“) (TSXV: HOCL) announces the closing of its previously announced Clearwater disposition (the “Clearwater Disposition”) and revisions to the Company’s credit agreement.
Closing of Clearwater Disposition
Highwood is pleased to announce the successful closing of the Clearwater Disposition to Tamarack Acquisition Corp., a wholly owned subsidiary of Tamarack Valley Energy Ltd., for cash consideration of $40.8 million. Proceeds will be used to repay amounts owing under the Company’s previous credit facility and other working capital deficits. Highwood is now positioned to achieve go forward shareholder value through a cleaner and less leveraged balance sheet.
Second Amended and Restated Credit Agreement (the “2nd ARCA”)
The Company, together with its sole lender, has executed a 2nd ARCA. The 2nd ARCA is comprised of a $10.0 million conforming operating facility with a maturity date of May 31, 2021 and is no longer a reserve-based lending facility.
The Company will be required to maintain a current ratio of not less than 1.0:1.0 and such ratio is to be tested at the end of each fiscal quarter. The Company is required to maintain a net debt to cash flow ratio no greater than 3.0 for the fiscal quarter ended December 31, 2020 and 2.0:1.0 as at the last day of each fiscal quarter beginning March 31, 2021.