CALGARY, March 29, 2020 /PRNewswire/ -OBSIDIAN ENERGY LTD.
(TSX – OBE, NYSE – OBE.BC) ("Obsidian Energy", the
"Company", "we", "us" or "our") is
pleased to announce completion of agreements with our lenders and
building landlord. All figures are in Canadian dollars unless
otherwise stated.
Further to our recent announcements, the Company has executed
final agreements resulting in the renewal of our syndicated credit
facility, amendments to our senior notes and renewed terms on our
Calgary office lease. All terms
are consistent as previously announced except for further financial
covenant relief, which will provide the Company additional
flexibility in the current oil price environment. A summary of the
terms is provided below:
- Syndicated Credit Facility:
-
- the borrowing base and amount available under the credit
facility are set at $550 million and
$450 million, respectively;
- the revolving period under the agreement has been extended to
May 31, 2021 with the end date of the
term period extended to November 30,
2021;
- a revolving period reconfirmation date will occur on
June 22, 2020, whereby the lenders
may accelerate the end date of the revolving period to June 30, 2020 with the end date of the term
period also concurrently accelerated to April 1, 2021;
- the next scheduled borrowing base redetermination will occur on
November 30, 2020; and
- elimination of the debt to Adjusted EBITDA covenants.
- Senior Notes:
-
- all the outstanding senior notes will mature on November 30, 2021;
- if the end date of the revolving period on the syndicated
credit facility is accelerated to April 1,
2021, as described above, then the senior notes maturities
will also be accelerated to that date; and
- elimination of the debt to Adjusted EBITDA covenants.
- Calgary Office Lease:
-
- 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), which is the end of the lease; and
- the building landlord has agreed to indemnify the Company on
all existing subleases.
NON-GAAP MEASURES
The financial measure Adjusted EBITDA included in this press
release does not have a standardized meaning prescribed by IFRS and
therefore is considered a non-GAAP measure; accordingly, it 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 its 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: our updated
syndicated credit facility and the possible reconfirmation,
redetermination and term-out dates under the various scenarios and
elimination of certain financial covenants; our updated senior note
maturity dates under various scenarios and elimination of certain
financial covenants; and our expected lease payments and indemnity
from the landlord going forward.
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; the
impact of the Albert Government curtailment; the impact of any
government assistance programs will have on the Company in
connection with, among other things, the COVID-19 pandemic; the
impact on energy demands going forward and the inability of certain
entities, including OPEC, to agree on crude oil production output
constraints; how the Supreme Court of Canada Redwater decision will
impact our Company moving forward; the impact of regional and/or
global health related events on energy demand; global energy
policies going forward; our ability to execute our long-term plan
as described herein and in our other disclosure documents and the
impact that the successful execution of such plan will have on our
Company and our shareholders; 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;
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;
and our ability to add production and reserves through our
development and exploitation activities.
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 possibility that we will not be able to continue to
successfully execute our long-term plan in part or in full, and the
possibility that some or all of the benefits that we anticipate
will accrue to our Company and our securityholders as a result of
the successful execution of such plans do not materialize; the
possibility that we are unable to execute some or all of our
ongoing asset disposition program on favorable terms or at all;
general economic and political conditions in Canada, the U.S. and globally, and in
particular, the effect that those conditions have on commodity
prices and our access to capital; industry conditions, including
fluctuations in the price of crude oil, natural gas liquids and
natural gas, price differentials for crude oil and natural gas
produced in Canada as compared to
other markets, and transportation restrictions, including pipeline
and railway capacity constraints; fluctuations in foreign exchange
or interest rates; unanticipated operating events or environmental
events that can reduce production or cause production to be shut-in
or delayed (including extreme cold during winter months, wild fires
and flooding); and the other 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.
The forward-looking statements contained in this document speak
only as of the date of this document. Except as expressly required
by applicable securities laws, we do not undertake any obligation
to publicly update any forward-looking statements. The
forward-looking statements contained in this document are expressly
qualified by this cautionary statement.
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SOURCE Obsidian Energy Ltd.