CALGARY, AB – Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra” or the “Company”) today announces that it has finalized the credit facility (the “Facility”) redetermination with its syndicate of lenders, and provides an operational update.
Credit Facility Update
Bonterra and its syndicate of lenders have agreed to amend the Facility as follows:
- Reflecting the Company’s ongoing strategy of focusing on the repayment of outstanding bank debt, Bonterra has agreed with its lenders to a borrowing base under the Facility of $265 million, consisting of a $200 million revolving credit facility and a $65 million non-revolving term loan;
- This represents a significant reduction in the non-revolving term loan, from $150 million to $65 million, leading to improved financial flexibility;
- The Facility revolves to December 31, 2021, with a maturity date of May 31, 2022; and
- With a semi-annual review in November 2021 together with the anticipated generation of significant free cash flow due to increased commodity pricing and higher production levels through increased drilling activity, and as agreed to with its lenders, Bonterra anticipates a further reduction to the non-revolving term loan portion of the Facility of up to $30 million; the Company aims to move all bank debt to a fully conforming revolving credit facility.
Bonterra is pleased to provide an update on the progress realized to date from its successful 2021 drilling program, which is designed to target high rate-of-return, low-risk light oil opportunities. Based on effective development in the first half of 2021, current corporate production is estimated at 13,200 BOE per day1, with the second half 2021 development drilling program having commenced by the end of June. The Company’s significant torque to oil prices combined with increasing production is expected to continue to accelerate efforts to deleverage. With forward strip WTI oil price averaging approximately US$71 for the remainder of 2021 and US$65 in 2022, supported in part by Bonterra’s current hedges, combined with a low decline production profile and strong free cash flow generation, the Company anticipates a net debt to cash flow target leverage ratio of between 1.0 to 1.5 by year end 2022. For further information regarding Bonterra’s future pricing sensitivities and outlook, see the Corporate Presentation posted on the Company’s website.
Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and British Columbia, focused on its strategy of long-term, sustainable growth and value creation for shareholders. The Company’s shares are listed on The Toronto Stock Exchange under the symbol “BNE”.