Gear Energy Ltd. Announces Update to Credit Facilities

CALGARY, May 24, 2019 /CNW/ – Gear Energy Ltd. (“Gear”) (TSX: GXE) today announces that the annual borrowing base redetermination of its credit facilities has been finalized. The amended credit facilities have been reduced from a total $115 million to $90 million and is now comprised of a $70 million syndicated revolving term credit facility and a $20 million operating credit facility. The reduction is the result of a variety of factors including the recent Supreme Court of Canada ruling on Redwater whereby any financial resources of a bankrupt entity will first be used to satisfy the outstanding abandonment obligations of its unproductive assets ahead of any secured creditors.

Currently, Gear is $70 million drawn on its credit facilities. As of May 31, 2019, net debt inclusive of convertible debentures is forecasted to be approximately $74 million. The terms of the amended credit facilities remain unchanged with the exception of additional compliance, consent and reporting requirements relating to Gear’s provincial liability management rating and decommissioning obligation. These addendums are normal course and are being applied industry-wide in Canada.