CALGARY, Alberta – NuVista Energy Ltd. (TSX:NVA, “NVA” or the “Corporation”) announces that the Toronto Stock Exchange (the “TSX”) has approved the commencement of a normal course issuer bid (the “NCIB”) and the renewal and extension of the Corporation’s $440 million credit facility; which has been amended to include the incorporation of sustainability linked performance targets and hence converted into a sustainability linked loan (the “SLL Credit Facility”).
Normal Course Issuer Bid
Pursuant to the NCIB, NuVista will purchase for cancellation, from time to time, as it considers advisable, up to a maximum of 18,190,261 common shares of the Corporation. The NCIB will become effective on June 14, 2022 and will terminate on June 13, 2023 or such earlier time as the NCIB is completed or terminated at the option of NuVista.
NuVista’s intention to launch a share buyback program is consistent with its strategy to continue its disciplined growth concurrently with continuing with net debt reduction and the commencement of capital return to shareholders. The Corporation currently believes that the best method for return of capital to shareholders is through share repurchases under the NCIB.
The maximum number of common shares to be purchased pursuant to the NCIB represents 10% of the public float, as of May 31, 2022. Purchases pursuant to the NCIB will be made on the open market through the facilities of the TSX and/or alternative trading systems. The number of common shares that can be purchased pursuant to the NCIB is subject to a daily maximum of 335,363 common shares (which is equal to 25% of the average daily trading volume of 1,341,453 from December 1, 2021 to May 31, 2022) with the exception that one block purchase in excess of the daily maximum is permitted per calendar week. The price that NuVista will pay for any common shares under the NCIB will be the prevailing market price on the TSX at the time of such purchase. A copy of the Form 12 Notice of Intention to Make a Normal Course Issuer Bid filed by the Corporation with the TSX can be obtained from the Corporation upon request without charge. In addition, under the SLL Credit Facility, NuVista may not purchase common shares under the NCIB if: (i) the Corporation’s proforma Senior Debt to EBITDA (each as defined in the SLL Credit Facility) for the next twelve months exceeds a specified ratio; or (ii) NuVista’s proforma drawings under the SLL Credit Facility exceed a threshold dollar amount. Under the Corporation’s current forecasts, NuVista expects to satisfy both conditions in the SLL Credit Facility for the purchase of common shares under the NCIB.
NuVista has entered into an automatic share purchase plan (“ASPP”) with Peters & Co. Limited (“Peters & Co.”) in order to facilitate repurchases of its common shares. Under the Corporation’s ASPP, Peters & Co. may repurchase shares under the normal course issuer bid during the Corporation’s self-imposed blackout periods. Purchases will be made by Peters & Co. based upon the parameters prescribed by the TSX and applicable securities laws and the terms of the plan and the parties’ written agreement. Outside of these blackout periods, common shares may be purchased under the NCIB in accordance with management’s discretion.
As of the close of business on May 31, 2022, the Corporation had 230,748,703 common shares issued and outstanding and a public float of 181,902,614 common shares. All common shares acquired under the NCIB will be cancelled.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Credit Facility Incorporates Sustainability Linked Performance Features
The conversion of the Corporation’s credit facility to a sustainability-linked loan (“SLL”) allows us to link our performance on key sustainability themes to our borrowing costs, whereby rates increase or decrease depending on whether we meet or miss the established annual sustainability performance targets (“SPTs”) related to:
- A reduction of Scope 1 & 2 GHG Intensity;
- Increased spending on Asset Retirement Obligations, over and above the minimum Alberta Energy Regulator established regulations as well as the number of well sites moved through the assessment and remediation process; and
- Gender diversity at the Board of Directors level.
Successfully achieving these SPTs will result in a decrease to the ongoing costs of the SLL Facility, and conversely, NuVista will incur an increase to the ongoing costs if it fails to meet the SPTs. The SPTs are important to our business plan and corporate values while demonstrating our continuing commitment to the environment.
The SLL Credit Facility was structured in collaboration with CIBC and RBC as Co-Sustainability Structuring Agents. CIBC acted as Sole Bookrunner, Administrative Agent and Co-Sustainability Structuring Agent; while RBC acted as Co-Syndicate Agent and Co-Sustainability Structuring Agent for the transaction.