Delphi Energy has entered into a binding agreement to sell and permanently assign 16 mmcf/d (approximately 35%) of its firm full-path service to the Chicago area on the Alliance pipeline system for $11.9 million. The transaction is expected to close on or about September 3, 2019 subject to approval by Alliance Pipeline Limited Partnership and Alliance Pipeline.
The company’s syndicate of lenders, led by Alberta Treasury Branches and including The Bank of Nova Scotia and Bank of Montreal, has extended the term out date of the company’s $105 million senior secured credit facility to July 12, 2019 in order to complete the annual borrowing base redetermination.
Upon closing of the sale of the 16 mmcf/d of excess Alliance service, Delphi expects to have bank debt net of working capital of approximately $68 million.
Upon closing, the net proceeds and reduction of Delphi’s outstanding letters of credit associated with the Alliance service will increase liquidity by approximately $13.3 million. The transaction more closely aligns the future natural gas transportation needs of the company with its natural gas production growth projections, given the increased focus on the ultra-rich condensate product mix being developed in West Bigstone. Given the high level of interest in the company’s excess Alliance service, Delphi is considering selling additional excess service.
Delphi Energy is a producer of liquids-rich natural gas. Delphi sells its natural gas in both the Chicago and AECO markets