Kiwetinohk Energy completed a 40% increase to its senior secured extendible revolving facility.
More specifically, Kiwetinohk’s existing lenders, including Bank of Montreal as agent and ATB Financial and National Bank of Canada as co-leads, completed their semi-annual borrowing base redetermination and agreed to amend the credit facility and increase the borrowing limit from $225 million to $315 million. To support this increase, Kiwetinohk has expanded its lending syndicate to six banks and has the support of Royal Bank of Canada, Bank of Nova Scotia and Business Development Bank of Canada as lenders.
The next semi-annual borrowing base review will be scheduled on or before May 31. The increased borrowing limit provides:
- Liquidity for current operations
- Additional capacity for any increase in letters of credit that may be required through the winter to support natural gas purchases to fulfill unutilized pipeline transportation commitments
- Funding of the Kiwetinohk’s 2022 capital program
As disclosed in its Sept. 30 interim financial statements, Kiwetinohk had borrowings of $32.6 million along with letters of credit of $52 million. The corporation now has $230 million of available short-term liquidity based on the credit facility.
The credit facility is composed of an operating facility of $65 million and a syndicated facility of $250 million. The credit facility is a 364-day committed facility available on a revolving basis until May 31. If the revolving period is not extended, the undrawn portion of the credit facility will be cancelled and the amount outstanding would be required to be repaid at the end of the non-revolving term (May 31, 2023). The borrowing base is determined based on the lenders’ evaluation of Kiwetinohk’s petroleum and natural gas reserves at the time and commodity prices. The credit facility, which has been filed on SEDAR, has no minimum hedging requirements or financial covenants.