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Edge Resources Inc. Doubles Credit Facilities and Lowers Financing Cost (ccnm)
CALGARY, ALBERTA--(Marketwired - July 24, 2014) - Edge Resources Inc. (TSX VENTURE:EDE)(AIM:EDG) ("Edge" or the "Company") is very pleased to announce that it has entered into a new revolving demand loan facility of up to $17 million (the "Facility") with ATB Corporate Financial Services ("ATB"). This Facility more than doubles the Company's existing credit facilities, and replaces its previous $8 million facility with National Bank of Canada, which was originally entered into on February 28, 2012 (the "National Bank Facility").
The Facility will carry an interest rate of the Canadian prime rate ("Prime") plus 1.75% per annum. This rate is significantly lower than that of the existing National Bank Facility which carried an interest rate of Prime plus 3% per annum. The new Facility is secured against the assets of the Company and is a borrowing base facility that is determined with reference to an independent engineering report from an engineering firm acceptable to ATB on all material hydrocarbon interests, including royalty interests, of the Company.
The Facility contains standard commercial covenants for facilities of this nature, including a requirement for the Company to maintain a working capital ratio** of not less than 1:1 and a senior debt to cash flow ratio** of not more than 3:1.
The Company has currently drawn only $6.3 million on the Facility, leaving significant headroom.
Brad Nichol, President and CEO of Edge commented, "This is a significant development for Edge and vastly improves our financial flexibility. This is a tremendous show of confidence from one of the biggest lenders to Canadian Junior Oil and Gas companies. The new facility also drastically reduces our cost of capital and provides us with a much larger pool of funds with which to fund new projects such as the acceleration of our drilling program in Eye Hill, infrastructure projects that aim to lower our operating costs and/or short-fuse, opportunistic acquisitions."
Additional information may also be available at
www.edgeres.com or
www.sedar.com.
About Edge Resources Inc.
Edge Resources is focused on developing its heavy oil properties within a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada. Management has consistently focused on:
1. Shallow, vertical, conventional programs with reduced capital, operational and geological risks
2. Very high or 100% working interests and fully operated assets
3. Pools and horizons with exceptionally high reserves in place
The management team's very high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, which gives Edge Resources a sustainable, low-cost, competitive advantage.