Calgary, Alberta – Cuda Oil and Gas Inc. (TSXV: CUDA) (“Cuda” or the “Company“) is pleased to announce an additional $4.0 million of financing (“Credit Facility B“) from its Senior Lender, Tallinn Capital Energy Limited Partnership (“Tallinn“), under the Senior Credit Facility agreement signed on January 20, 2021. The additional proceeds will be used for the payment of account payables relating to, and continued development of, its oil assets and miscible gas flood injection program in the Powder River Basin, Converse County, Wyoming.
The original maturity date of November 30, 2021 will remain in effect for the Senior Credit Facility and will also apply to Credit Facility B, and Credit Facility B will be charged interest at 16% per annum unless an event of default occurs and remains, allowing the Senior Lender to apply interest at 19% per annum on outstanding amounts. Repayment of the aggregate credit facilities will continue to follow the original repayment schedule under the Senior Credit Facility. Tallinn will receive customary commitment, work and monitoring fees and a 1% deferred interest fee on Credit Facility B. Approval of the additional financing was received from the Company’s subordinate Canadian institutional lender.
Except for an oil put requested by Tallinn, amendments to the Senior Credit Facility agreement as a result of Credit Facility B will not include any additional financial, operational and environmental covenants. However, Tallinn and the Company have agreed to engage a sales advisor by August 9, 2021 to pursue a sales process, including the opening of an online data room by August 27, 2021. Additionally, the Company shall execute one or more non-binding letters of intent by September 30, 2021 and a binding offer to purchase by October 31, 2021. As previously communicated, further rationalization of assets and/or funding through share issuances, private placements, restructuring of existing or new credit facilities, non-core property sales, increased production from core properties combined with improvements in realized oil and gas prices received and/or a combination of these alternatives will be required to continue as a going concern.