CALGARY, March 15, 2020 /PRNewswire/ - OBSIDIAN ENERGY
LTD. (TSX – OBE, NYSE – OBE.BC) ("Obsidian Energy", the
"Company", "we", "us" or "our")
announces further to our press release on March 4, 2020 that we have reached an agreement
with our noteholders to amend the senior note agreements to align
all note maturity dates to November 30,
2021. In addition, the Company has reached an agreement with
its building landlord on renewed lease terms for its Calgary office space.
Specifically, the senior note maturities have been adjusted as
follows:
- the senior notes maturing on March 16,
2020, May 29, 2020 and
December 2, 2020 will be extended to
November 30, 2021;
- the senior note maturing on November 30,
2021 will remain the same;
- the senior notes maturing on December 2,
2022 and December 2, 2025 will
now mature on November 30, 2021;
and
- if the end date of the revolving period on the syndicated
credit facility is accelerated to April 1,
2021, as described below, then the senior notes maturities
will also be accelerated to that date.
Given the current fall in oil prices and other market factors,
the noteholders have also agreed in principle to amend the
Company's Senior debt and Total debt to Adjusted EBITDA covenants
as outlined below, subject to the approval of members of the
syndicated bank facility:
- for the period January 1, 2020 to
June 30, 2020, the maximum Senior
Debt to Adjusted EBITDA ratio will be less than or equal to
3.5:1;
- for the period July 1, 2020 to
September 30, 2020, the maximum for
both the Senior Debt and Total Debt to Adjusted EBITDA ratios will
be less than or equal to 4.1:1; and
- for the period October 1, 2020 to
June 30, 2021, the maximum for both
the Senior Debt and Total Debt to Adjusted EBITDA ratios will be
less than or equal to 6:1.
The Company has also reached an agreement with its building
landlord on renewed lease terms for its Calgary office space. The effective date of
these terms is February 1, 2020. The
concessions are:
- lease payments will total $0.833
million per month, net of sub-leases, from February 2020 to January
2025 ($10 million on an
annualized basis); and
- the building landlord has agreed to indemnify the Company on
all existing subleases.
The implementation of the agreement reached with noteholders is
subject to the execution of definitive documentation by
March 31, 2020. If execution of the
definitive documentation is not completed by March 31, 2020, then the senior note originally
maturing on March 16, 2020 will
mature on April 7, 2020. The
agreement with the building landlord requires the execution of
definitive documentation by March 31,
2020 and is subject to certain consents.
The Company anticipates releasing our 2019 year-end financial
statements once all the required approvals have been obtained and
definitive documentation executed.
Non-GAAP measures
Certain financial measure including Adjusted EBITDA, included in
this press release do not have a standardized meaning prescribed by
IFRS and therefore are considered non-GAAP measures; accordingly,
they may not be comparable to similar measures provided by other
issuers. Adjusted EBITDA is cash flow from operations excluding the
impact of changes in non-cash working capital, decommissioning
expenditures, financing expenses, realized gains and losses on
foreign exchange hedges on prepayments, realized foreign exchange
gains and losses on debt prepayment, restructuring expenses and
other expenses. Adjusted EBITDA as defined by Obsidian Energy's
debt agreements excludes the EBITDA contribution from assets sold
in the prior 12 months and is used within Obsidian Energy's
covenant calculations related to our syndicated bank facility and
senior notes. Additionally, under the syndicated credit facility,
realized foreign exchange gains or losses related to debt
maturities are excluded from the calculation.
Forward-Looking Statements
Certain statements contained in this document constitute
forward-looking statements or information (collectively
"forward-looking statements"). Forward-looking statements are
typically identified by words such as "anticipate", "continue",
"estimate", "expect", "forecast", "budget", "may", "will",
"project", "could", "plan", "intend", "should", "believe",
"outlook", "objective", "aim", "potential", "target" and similar
words suggesting future events or future performance. In
particular, this document contains forward-looking statements
pertaining to, without limitation, the following: the expected
revised maturity dates for the senior notes and the updated Senior
and Total debt to Adjusted EBITDA covenant requirements for the
time periods stated, being still subject to the syndicated bank
facility member approval, and the background for the change; the
lease payments to be made going forward by the Company to the
building landlord and being indemnified on all existing subleases;
the dates for definitive agreements to be reached with the
noteholders and the building landlord and what will happen if they
are not; and when the Company anticipates releasing our 2019
year-end financial statements.
With respect to forward-looking statements contained in this
document, we have made assumptions regarding, among other things
that we do not dispose of any material producing properties; that
the current commodity price and foreign exchange environment will
continue or improve; future capital expenditure levels; future
crude oil, natural gas liquids and natural gas prices and
differentials between light, medium and heavy oil prices and
Canadian, WTI and world oil and natural gas prices; future crude
oil, natural gas liquids and natural gas production levels; future
exchange rates and interest rates; future debt levels; our ability
to execute our capital programs as planned without significant
adverse impacts from various factors beyond our control, including
weather, infrastructure access and delays in obtaining regulatory
approvals and third party consents; our ability to obtain equipment
in a timely manner to carry out development activities and the
costs thereof; our ability to market our oil and natural gas
successfully to current and new customers; other than noted herein,
our ability to obtain financing on acceptable terms, including our
ability to renew or replace our syndicated bank facility and our
ability to finance the repayment of our senior notes on maturity.
Although we believe that the expectations reflected in the
forward-looking statements contained in this document, and the
assumptions on which such forward-looking statements are made, are
reasonable, there can be no assurance that such expectations will
prove to be correct. Readers are cautioned not to place undue
reliance on forward-looking statements included in this document,
as there can be no assurance that the plans, intentions or
expectations upon which the forward-looking statements are based
will occur. By their nature, forward-looking statements involve
numerous assumptions, known and unknown risks and uncertainties
that contribute to the possibility that the forward-looking
statements contained herein will not be correct, which may cause
our actual performance and financial results in future periods to
differ materially from any estimates or projections of future
performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other
things, the factors described under "Risk Factors" in our Annual
Information Form and described in our public filings, available in
Canada at www.sedar.com and
in the United States at
www.sec.gov. Readers are cautioned that this list of risk factors
should not be construed as exhaustive.
Obsidian Energy shares are listed on both the Toronto Stock
Exchange (symbol "OBE") and New York Stock Exchange (symbol
"OBE.BC"). All figures are in Canadian dollars unless otherwise
stated.
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SOURCE Obsidian Energy Ltd.