Pipestone Energy successfully re-financed its existing credit facilities with a $225 million reserve-based loan (RBL), which provides meaningful financial flexibility going forward.
The facility consists of a $195 million syndicated revolving facility and a $30 million bi-lateral operating facility. The syndicated facility includes an accordion feature, which provides for a $25 million increase to the borrowing capacity, subject to the mutual consent of its lenders.
The revolving period of the RBL currently ends on November 30, 2020 with an additional one-year term out period thereafter if the revolving period is not extended. The borrowing base on the facility will be redetermined bi-annually in the spring and fall each year. The syndicate consists of four banks, including National Bank Financial and Bank of Montreal as co-lead arrangers and National Bank Financial as the sole bookrunner with Alberta Treasury Branch, and Canadian Western Bank rounding out the syndicate.
The RBL fully replaces the $198.5 million two-year first lien credit facility, which consisted of a $168.5 million term loan, a $10 million revolving credit facility, and a $20 million letter of credit facility. At closing, the company has a total draw of approximately $164 million on its syndicated facility, cash and cash equivalents of approximately $28 million and an estimated working capital deficit (excluding cash) of $26 million. As a result, at closing Pipestone’s net debt position is approximately $162 million. In addition, the company has outstanding letters of credit totaling $14 million allocated towards its Operating Line availability.
Pipestone Energy is an oil and gas exploration and production company with its head office located in Calgary, AB.