Mr. Paul Wanklyn reports
PIPESTONE ENERGY CORP. ANNOUNCES IT HAS SUCCESSFULLY MAINTAINED ITS $225 MILLION RESERVE BASED LOAN AND PROVIDES AN OPERATIONS UPDATE
Pipestone Energy Corp. has successfully redetermined its reserve-based loan (RBL) with its syndicate of banks, maintaining its credit capacity of $225-million.
RBL and financial liquidity update
Pipestone Energy has closed on its RBL redetermination with its corporate banking syndicate, consisting of National Bank Financial Inc., Bank of Montreal, ATB Financial and Canadian Western Bank. The credit facility's capacity has been maintained at $225-million, of which the company was drawn approximately $184-million as of June 12, 2020. The company's previously announced $60-million capital program for 2020 is more than 95 per cent complete, and with minimal capital expenditures forecast for the remainder of 2020, the company expects to generate cash flow in excess of capital spending. As part of the amendment to its credit facility, the company is restricted from spending more than $65-million of capital in 2020 without unanimous consent from its banking syndicate. This provision is a temporary amendment, which will terminate at the next redetermination, scheduled for November, 2020.
Pipestone Energy continues to actively manage its production in response to very high volatility in crude oil prices over the past few months. Due to very low Edmonton condensate pricing during May, 2020, the seven wells on the recently tested 6-24 pad were shut in for the month. Despite this, based on field estimates, the company averaged about 14,700 barrels of oil equivalent per day (64 per cent gas and 36 per cent natural gas liquids, including condensate) in May from the north of the Wapiti River 15-14 and 3-1 pads (19 total wells) as well as contribution from the legacy South of the Wapiti production. With oil prices improving over the past two weeks the company is gradually bringing wells from the 6-24 pad back on stream. The recently completed six-well 6-30 pad is also now available for production, with installation of well site facilities recently completed for $500,000 per well which is the lowest equipping and tie-in cost achieved to date at Pipestone. As previously disclosed, the 6-30 pad is a pacesetter on all-in realized DCE&T cost at $5.5-million (2,440 m lateral and 2.3 T/M proppant loading).
About Pipestone Energy Corp.
Pipestone Energy is an oil and gas exploration and production company with its head office located in Calgary, Alta.
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