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.