EDC provides credit commitment to Bonterra Energy

Bonterra Energy Corp has received a reserve-based lending commitment from Export Development Canada of up to C$38.4 million.

Bonterra Energy Corp has received a reserve-based lending commitment from Export Development Canada of up to C$38.4 million. Combined with a C$45 million term facility from Business Development Bank of Canada and other funding, the company now has C$104 million in credit commitments. Calgary-based Bonterra is an oil and gas exploration company.

PRESS RELEASE

CALGARY, AB, Oct. 5, 2020 /CNW/ – Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra” or the “Company”) is pleased to announce that it has received a reserve based lending commitment from Export Development Canada (“EDC”) of up to $38.4 million (the “EDC Commitment”). In addition, Bonterra is pleased to confirm that to date, its vendors have been approved for $21 million of funding through Alberta’s Site Rehabilitation Program (“SRP”). These amounts build on the Company’s recently approved $45 million Business Development Bank of Canada (“BDC”) term facility.

Between EDC, BDC, and the SRP, the Company has now been approved for over $104 million of credit availability (pending legal and banking documentation). These commitments will provide Bonterra with significant additional long-term liquidity at reasonable interest rates to withstand the impacts of the COVID-19 pandemic and allow the Company to continue pursuing development of its high-quality, Cardium light oil asset base in order to generate long-term, sustainable net asset value per share growth as the economy recovers.
EDC Commitment

The EDC Business Credit Availability Program (“BCAP”) was initially announced to provide additional liquidity and cash flow to companies who were deemed financially viable pre-COVID-19, allowing them to continue operations and development activity throughout a recovery from the pandemic, supporting a return to pre-COVID-19 operating levels within a manageable timeframe based on strengthening crude oil, liquids and natural gas prices. Bonterra has been in discussions with both EDC and BDC regarding their programs since April 2020, and believes the $38.4 million EDC Commitment, combined with the previously announced and approved BDC term facility, subject to legal and banking documentation, demonstrates the confidence EDC and BDC maintain in the Company. The $38.4 million lending commitment has a tenure of up to two years, is renewable at maturity at EDC’s discretion, and is subject to legal and banking documentation, in a form satisfactory to EDC .

SRP Awards
In partnership with its vendors, the Company has received, to date, $20 million in-kind of SRP funding and an additional $1 million as an Area Based Closure (“ABC”) participant for a total of $21 million. The funding will assist with abandoning and reclaiming 189 pipelines (179,000 meters) and 379 well bores, ultimately reducing Bonterra’s operated inactive well count by 59% over the next two years and reducing the Company’s pre-SRP annual spending commitments under the ABC program from approximately $3 million to $2 million per year going forward.

BDC Credit Facility
As previously announced, the Company was approved by BDC for a second lien non-revolving four-year term facility for up to $45 million (the “BDC Term Facility”), subject to legal and banking documentation. The BDC Term Facility offers Bonterra significant additional long-term liquidity at reasonable interest rates to withstand the impacts of the COVID-19 pandemic and allow the Company to continue pursuing development of its high-quality, Cardium light oil asset base in order to generate long-term, sustainable net asset value per share growth as the economy recovers.

Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and British Columbia, focused on its strategy of long-term, sustainable growth and value creation for shareholders. The Company’s shares are listed on The Toronto Stock Exchange under the symbol “BNE”.