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Enter Symbol
or Name
USA
CA



Delphi Energy Corp
Symbol DEE
Shares Issued 155,510,378
Close 2016-05-27 C$ 1.14
Market Cap C$ 177,281,831
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Delphi lenders reduce borrowing base to $115-million

2016-05-27 23:28 ET - News Release

Mr. David Reid reports

DELPHI ENERGY ANNOUNCES BANKING UPDATE

Delphi Energy Corp. has extended its annual borrowing-base review with its senior lenders.

Delphi and the lenders under its senior credit facility entered into an amending agreement dated May 27, 2016, which, among other things, reduced the aggregate availability of such facility from $132.5-million to $115-million, consisting of a $105-million extendible revolving-term credit facility and a $10-million operating credit facility. Pursuant to the terms of the amending agreement, the lenders have consented to a financing, the issuance and the significant terms and conditions of the financing, and an extension of the redetermination and review date of the senior credit facility to June 30, 2016, at which time the company expects the borrowing base will be reduced to $85-million. In addition, the subordinated lenders have agreed to an extension of the maturity date of the subordinated debt to Aug. 31, 2016. If the previously announced offering of Delphi is not completed, an event of default will be triggered under the senior credit facility. For details regarding the company's previously announced unit offering of secured notes and warrants, please refer to the press release dated May 27, 2016.

The net proceeds of the previously announced offering will be used to permanently repay in full the company's subordinated third party credit facility of approximately $14.1-million, and the balance thereafter will be used to reduce the outstanding principal under the revolving facility of the senior credit facility.

The previously announced offering is part of the company's financial strategy to target total debt capitalization capacity of $125-million to $135-million and will form a core piece of the company's debt capitalization, allowing a reduction of the revolving bank indebtedness. The company's total debt capacity is supportable in the current pricing environment by the nature of the company's Montney asset base, consistent operational and financial results, and a proven hedging strategy. The company has managed its capital structure over the past four years without dilution to its equity holders and reduced its total debt by 30 per cent over the past 12 months through a successful disposition program of non-core assets. The company continues to pursue disposition and other strategic opportunities to further enhance its growth efforts within its Bigstone Montney core asset, while providing increased financial flexibility.

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