Hemisphere Energy entered into a new and significantly increased credit facility with Cibolo Energy Partners, a Houston-based firm focused on energy investment opportunities.

The new credit facility is a strategic and transformational transaction for Hemisphere that will allow the company to accelerate the development of its southern Alberta Atlee Buffalo waterflood oil assets. Consequently, the company repaid and terminated its existing credit facility with its Canadian bank.

Hemisphere entered into a first lien senior secured credit agreement with Cibolo providing for a multi-draw, non-revolving term loan facility of a maximum aggregate principal amount of up to $35 million, with an initial commitment amount of $15 million. This represents an approximate 50% increase in currently available credit to Hemisphere compared to its former credit facility.

Vancouver-based Hemisphere has made an initial draw of $10 million of the initial $15.0 million commitment. Additional commitments are subject to further approval by Cibolo. The interest rate for the new credit facility is the three-month U.S. dollar LIBOR floor of 1%, plus 7.50% payable quarterly, for a five-year term with a maturity date of September 15, 2022.

The new credit facility has been used to fully repay the outstanding indebtedness under the former credit facility and will also be used to greatly expand the company’s development in the Atlee Buffalo area.