Seven Generations Energy Ltd.'s (TSX:VII) lenders have agreed to increase the size of the company's senior secured credit facility by about 27 percent, from $1.1 billion to $1.4 billion. With this increase, 7G had available funding of about $1.9 billion as of March 31, 2017 on a pro-forma basis.
7G's credit facility has moved from a reserve-based structure, with lending capacity re-determined on a semi-annual basis, to a covenant-based facility governed by senior secured leverage and interest coverage metrics. The new facility structure provides 7G with four years of funding and ensures committed credit capacity across the commodity price cycle.
"Our financial strength is reflected in this additional credit capacity and flexibility. Shifting away from reserves-based security to a four-year covenant-based facility recognizes the high quality of our assets, their capacity to generate profitable growth, a large established production base with processing, transportation and markets, as well as our track record of successfully converting our significant resources to reserves, production, cash flow and earnings. We plan to continue our conservative approach to debt and draws on our credit facility. We now have access to $1.4 billion in addition to adjusted working capital of about $500 million that we had at the end of the first quarter of 2017. Our credit facility remains undrawn," said Chris Law, 7G's Chief Financial Officer.
The credit facility was led by RBC Capital Markets and had participation from a syndicate of 12 other financial institutions. The credit facility matures on June 9, 2021. A copy of the Credit Agreement is available at www.sedar.com.
Seven Generations Energy
Seven Generations is a low-supply-cost, high-growth Canadian natural gas developer generating long-life value from its liquids-rich Kakwa River Project, located about 100 kilometres south of its operations headquarters in Grande Prairie, Alberta. 7G's corporate headquarters are in Calgary and its shares trade on the TSX under the symbol VII.
Further information on Seven Generations is available on the company's website: www.7genergy.com
SOURCE: Seven Generations Energy Ltd.
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