CWC Energy Services reduced the borrowing base of its syndicated credit facility from $100 million to $75 million. In connection with this reduction, CWC also obtained a new five-year $12.8 million term credit facility from ATB Financial.
CWC pursued the reduction in order to reduce standby charges. It will use the proceeds from the new facility to reduce borrowings under the syndicated facility.
The new facility is secured by, among other things, a collateral mortgage from CWC in favor of ATB over certain properties located in Sylvan Lake, Brooks and Slave Lake, Alberta.
The new borrowing arrangements significantly reduce the company’s overall borrowing costs by reducing standby charges on the syndicated credit facility and realizing a lower interest rate on the term credit facility. Annual savings from these new arrangements are expected to reduce CWC’s borrowing costs by 40 basis points (or 0.4%) per annum. As of June 30, 2018, CWC had approximately $50 million of availability under the credit facility.
CWC Energy Services is a contract drilling and well servicing company operating in the Western Canadian Sedimentary Basin with a complementary suite of oilfield services, including drilling rigs, service rigs, swabbing rigs and coil tubing.
