Lightstream Resources Ltd. (the “Company” or “Lightstream”) (LTS.TO) announces the renegotiated terms agreed to with lenders in our secured revolving credit facility.
Further to our first quarter results press release of May 5, 2015, we have concluded negotiations and received signed commitments from our lending syndicate for an amended credit facility which is subject to execution of a definitive agreement by the parties. The amended credit facility provides for a borrowing base of $750 million, subject to re-determination on a semi-annual basis, and the same maturity date of June 2, 2017, subject to further extension. During the term of the amended facility, the Company will not pay cash dividends without the unanimous consent of the lenders. The facility now has a single financial covenant that limits the ratio of facility borrowing to trailing twelve month EBITDA to:
January 1, 2015 – September 30, 2015 – 3.0x
October 1, 2015 – June 30, 2016 – 3.75x
July 1, 2016 – December 31, 2016 – 4.25x
January 1, 2017 – June 2, 2017 – 4.0x
As of March 31, 2015, we had $638 million of debt drawn on our credit facility compared to $1.07 billion as of March 31, 2014. Furthermore, over the same period our accounts payable have been reduced by $174 million and the face value of our senior unsecured notes reduced by US$100 million. On a pro forma basis at March 31, 2015, we would have approximately $105 million of available credit. For the remainder of 2015, based on our guidance, we expect to further reduce the amount borrowed on our credit facility from first quarter levels with excess free funds flow, assuming a WTI oil price of US$55.00/bbl for the second half of the year.
The revised borrowing base and amendments to our covenants are expected to provide an appropriate level of liquidity and covenant relief during the current low-price commodity environment and support an acceleration of our drilling program should oil prices increase and/or costs come down.
Given the timing of these developments, we will not be hosting a conference call. Please direct any questions to the contacts below.
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.
