Annual Borrowing Base Redetermination
Over the last year and a half, Gear has focused on substantially improving its balance sheet. This has translated into continuous and significant debt reductions which have provided Gear with top decile leverage metrics in its peer group. The existing and estimated future improvements to Gear’s leverage scenario are expected to allow Gear to contemplate multiple strategic options for enhancing shareholder value. These options include (but are not limited to) buying back shares, paying dividends, pursuing mergers and acquisitions, and investing in incremental growth. With Gear’s forecasted free funds from operations through the remainder of the year continuing to reduce debt, Gear and its lenders have agreed to a gradual reduction of its borrowing base which will reduce Gear’s standby fees. Gear’s borrowing base will be structured with a declining balance as follows:
Date |
Borrowing Base ($MM) |
March 2021 |
60 |
June 2021 |
53 |
September 2021 |
48 |
May 2022 |
41 |
Gear is forecast to be drawn $38 million on its credit facilities on June 30, 2021.
May Update to Shareholders
The new May 2021 monthly update can be accessed via the following link https://gearenergy.com/updates/. Future updates will be disseminated each month via press release.