CALGARY, June 7, 2019 /CNW/ - Journey Energy Inc. (JOY – TSX) ("Journey" or the "Company") announces today that the annual borrowing base redetermination of its credit facilities has been finalized. The amended credit facilities have been reduced from the current amount of $100 million to $90 million. The new facility is comprised of a $75 million syndicated revolving term credit facility and a $15 million working capital facility. The reduction in the facility was the result of several factors with the most significant items being the reduction in forecast natural gas prices, as well as the potential lending implications stemming from the recent Supreme Court of Canada ruling in the receivership of Redwater Energy Corporation.
The terms of the amended credit facilities generally remain unchanged with the following exceptions: i) Journey must seek the approval of the lending syndicate to borrow any amount above $85 million; ii) the maturity date of the borrowings under the facility will now be April 30, 2020; and iii) there are new compliance, consent and reporting requirements to the banks relating to Journey's provincial liability management rating, as well as the calculation of its future abandonment and reclamation costs. Journey is currently drawn approximately $70 million on its credit facilities. Journey's management believes that the revised credit facilities will provide adequate liquidity for the execution of its 2019 business plan.
About the Company
Journey is a Canadian exploration and production company focused on oil-weighted operations in western Canada. Journey's strategy is to grow its production base by drilling on its existing core lands, implementing waterflood projects, and by executing on accretive acquisitions. Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods. Journey is also in the early phases of advancing development of an unconventional shale resource play in the oil window of the Duvernay, in the western shale basin of our central core area.
FORWARD LOOKING STATEMENTS AND OTHER ADVISORIES
Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, which involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Journey, including, without limitation, those listed under "Risk Factors" and "Forward Looking Statements" in the Annual Information Form filed on www.SEDAR.com on March 26, 2019. Forward-looking information may relate to Journey's future outlook and anticipated events or results and may include statements regarding the business strategy and plans and objectives. Particularly, forward-looking information in this press release includes, but is not limited to, information concerning Journey's credit facilities, required lender consents and reporting obligations and the ongoing liquidity of Journey to execute its current business plan. Journey cautions investors in Journey's securities about important factors that could cause Journey's actual results to differ materially from those projected in any forward-looking statements included in this press release. Information in this press release about Journey's financial position is based on assumptions about future events, including economic conditions and courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that information regarding Journey's financial outlook should not be used for purposes other than those disclosed herein. Forward-looking information contained in this press release is based on current estimates, expectations and projections, which Journey believes to be reasonable as of the current date. No assurance can be given that the expectations set out herein will prove to be correct and accordingly, you should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as required by applicable securities law.
Readers are cautioned that the above list of risks and factors are not intended to be exhaustive. Additional information on these and other factors that could affect operating and financial results are, or will be, included in reports filed with the applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
No securities regulatory authority has either approved or disapproved of the contents of this press release.
SOURCE Journey Energy Inc.
For further information: Alex G. Verge, President and Chief Executive Officer, 403-303-3232, [email protected] or Gerry Gilewicz, Chief Financial Officer, 403-303-3238, [email protected]; Journey Energy Inc., 700, 517 - 10th Avenue SW, Calgary, AB T2R 0A8, 403-294-1635, www.journeyenergy.ca