Caution I held this company back when it was galleon and am sniffing around at bargain basement deals. Each to their own and do your due diligence.
The balance sheet is weak in paticular cash. Cash is king when you hit the "Circle of Life"
I think its fair to say the dividend is done at prevailing oil price and the reduction in cashflow could cause issues with their credit facilities. Here's a cut out of the quarterleys (look on sedar if this doens't work)
The credit facilities of $695 million consist of a
$655 million revolving syndicated facility and a $4
0
million operating facility. Total borrowings permit
ted under these facilities cannot exceed the
borrowing base, which is determined by the lenders
on a semi-annual basis or upon the occurrence
of a material event. The next borrowing base review
will occur prior to November 30, 2014 and the
next annual review will occur prior to May 31, 2015
.
Security for the credit facilities at September 30,
2014 included a demand debenture for $1.5 billion
which provides for a first ranking security interes
t and floating charge over all of the assets and
property of the Company.
The credit facilities bear interest at the prime ra
te or Libor rate, plus a margin, and in respect of
banker’s acceptances requires the payment of a stam
ping fee equal to a margin. The margins range
from 1.00% per annum to 3.50% per annum, based upon
the Company’s debt to earnings before
interest, taxes, exploration expenses, and all non-
cash items including depletion, depreciation and
amortization (“EBITDA”) ratio. For the nine months
ended September 30, 2014, the effective interest
rate, including standby and other fees, was 4.4% (S
eptember 30, 2013 – 4.4%).
As at September 30, 2014, the Company is in complia
nce with all covenants, obligations and
conditions of its credit agreement. The covenants i
n the facilities relate to debt to EBITDA, interest
coverage, permitted dispositions and permitted hedg
ing.
I think I will sit on the sidelines for a bit.
0
million operating facility. Total borrowings permit
ted under these facilities cannot exceed the
borrowing base, which is determined by the lenders
on a semi-annual basis or upon the occurrence
of a material event. The next borrowing base review
will occur prior to November 30, 2014 and the
next annual review will occur prior to May 31, 2015
.
Security for the credit facilities at September 30,
2014 included a demand debenture for $1.5 billion
which provides for a first ranking security interes
t and floating charge over all of the assets and
property of the Company.
The credit facilities bear interest at the prime ra
te or Libor rate, plus a margin, and in respect of
banker’s acceptances requires the payment of a stam
ping fee equal to a margin. The margins range
from 1.00% per annum to 3.50% per annum, based upon
the Company’s debt to earnings before
interest, taxes, exploration expenses, and all non-
cash items including depletion, depreciation and
amortization (“EBITDA”) ratio. For the nine months
ended September 30, 2014, the effective interest
rate, including standby and other fees, was 4.4% (S
eptember 30, 2013 – 4.4%).
As at September 30, 2014, the Company is in complia
nce with all covenants, obligations and
conditions of its credit agreement. The covenants i
n the facilities relate to debt to EBITDA, interest
coverage, permitted dispositions and permitted hedg
ing.