CALGARY, AB, Nov. 30, 2020 /CNW/ - Stampede Drilling Inc.
("Stampede" or the "Company") is pleased to announce the closing of
a loan facility (the "BDC Facility") in an amount of up to
$2 million pursuant to a letter of
offer dated October 28, 2020 with the
Business Development of Canada
("BDC"). The BDC Facility has an interest rate equal to BDC's
floating base rate, currently at 4.55%, a maturity date of
September 1, 2023, and comes with
customary representations, warranties and covenants. The Company
also granted BDC a security interest (the "BDC Security Interest")
in all present and after-acquired property, except consumer goods,
accounts receivable and inventory. BDC, HSBC Bank Canada ("HSBC")
and the Company have also entered into a priority agreement,
whereby the BDC Security Interest is postponed and subordinated to
the security interests held by HSBC in the personal property of the
Company in connection with the facility letter dated December 20, 2018 from HSBC to the Company, as
acknowledged and agreed to by the Company on December 20, 2018 (the "HSBC
Facility").
The Company has also announced an amendment to its existing
credit agreement, including adjustments to, and suspension of,
certain debt covenant thresholds with HSBC (the "HSBC Amendment")
commencing on December 31, 2020 until
December 31, 2021, as well as other
amendments to reflect the establishment of the BDC Facility. While
the Company has not breached any covenants, management felt that in
light of the ongoing negative impact on 2020 drilling activity from
the COIVID-19 pandemic and depressed oil prices, it was prudent to
make these amendments to provide the Company with additional
financial assurance and flexibility as it navigates the
Unprecedented uncertainties in the present environment.
In commenting on these initiatives, Lyle
Whitmarsh, President and Chief Executive Officer, noted:
"The addition of the BDC Facility and HSBC Amendment, combined with
the extensive cost cutting initiatives implemented in Q1 2020, will
help provide the Company the appropriate level of flexibility to
strategically manage the business through this global pandemic and
positions the Company well for a market recovery."
ADVISORY ON FORWARD-LOOKING STATEMENTS:
This news release contains forward-looking statements and
information ("forward-looking statements") within the meaning of
applicable securities laws and is based on the expectations,
estimates and projections of management of Stampede as of the date
of this news release, unless otherwise stated. The use of any of
the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends" and similar expressions are intended
to identify forward-looking statements.
More particularly and without limitation, this news release
contains forward-looking statements concerning: the intention of
entering into the HSBC Amendment and the BDC Facility; the
achievement of the Company's financial covenants with HSBC and BDC;
the impact of regional and/or global health related events,
including the ongoing COVID-19
pandemic, on energy demand and
commodity prices; and the outlook for the Company. Such
forward-looking statements are provided for the purpose of
providing information about management's current expectations and
plans relating to the future. Investors are cautioned that
reliance on such information may not be appropriate for other
purposes, such as making investment decisions.
The forward-looking statements address future events and
conditions and, as this is the case, such information by its very
nature involves inherent risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a
number of factors and risks.
Readers are cautioned that the foregoing list of factors is not
exhaustive. The reader is cautioned not to place undue reliance on
these forward-looking statements. The forward-looking statements
contained in this news release are made as of the date hereof and
Stampede undertakes no obligations to update publicly or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
SOURCE Stampede Drilling Inc.