Hammerhead Energy expanded its credit facility to C$450 million ($328.1 million) (from C$350 million [$255.2 million]), effective Sept. 27, 2023. The increase in the credit facility was achieved through a combination of increased commitments by the existing lenders and the addition of the Bank of Montreal into the lending syndicate.
The increase in the credit facility has allowed Hammerhead to repay, at par value, the remaining $63.7 million of principal and accrued interest outstanding on its term debt prior to maturity. The early repayment of the term debt will reduce interest expense and eliminate any restrictions on Hammerhead instituting a return of capital strategy for the benefit of its shareholders. Hammerhead expects to communicate its formal return of capital policy, subject to approval by Hammerhead’s board of directors with the release of its third quarter results on Nov. 7.
“We recognize the critical support of our existing lenders, and welcome the addition of the Bank of Montreal to the syndicate,” Scott Sobie, president and CEO of Hammerhead, said. “The support of these partners has been critical in allowing Hammerhead to deliver value for our shareholders. The pending completion of our new South Karr surface infrastructure is expected to support material and consistent free cash flow that will further de-risk Hammerhead for our lenders and continue to create value for our shareholders.”
