Lightstream Resources Ltd. (the “Company” or “Lightstream”) (TSX:LTS) announces the results of the semi-annual borrowing base re-determination of our secured termed credit facility (“Credit Facility”), resulting in approximately $200 million in available liquidity based on September 30, 2015 debt balances.
Effective November 13, 2015, the borrowing base of our Credit Facility has been reduced to $550 million from $750 million. The Credit Facility currently matures in June 2017 and the single financial covenant limits the ratio of facility borrowing to trailing twelve month EBITDA until June 2016 to 3.75 times, which increases to 4.25 times in the second half of 2016 and decreases to 4.0 times for the first half of 2017. At September 30, 2015, we were in compliance with that covenant with a ratio of 1.0 time.
In this low commodity price environment, we are committed to a conservative capital plan funded though internally generated cash flow, and to using any surplus cash to reduce debt. Should the macro environment of service costs and commodity pricing improve to warrant an increased drilling program, we anticipate the revised borrowing base and current credit capacity of approximately $200 million to provide an adequate level of liquidity to fund such a program.
FALHER GAS WELL INITIAL RESULTS
Throughout 2015 we have been actively drilling Falher gas wells in our Cardium business unit, while managing the capacity at our facilities in this area. Subsequent to the third quarter 2015, we completed a 100% operated high-impact Falher gas well. This well is presently on production at an initial rate of over 12 mmcf/d, which is higher than our original expectation. We are pleased with the performance of this play and based on current infrastructure and processing capacity, we expect our average and exit production for 2015 to continue to be within our stated guidance ranges.
Lightstream Resources Ltd. is an oil and gas exploration and production company focused on light oil in the Bakken and Cardium resource plays. We are committed to delivering industry leading operating netbacks, strong cash flows and consistent operating results through leading edge technology applied to a multi-year inventory of existing and emerging resource play opportunities. Our long-term strategy is to efficiently develop our assets and deliver an attractive dividend yield.