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Long Run Explor Ltd Ord WFREF

"Long Run Exploration Ltd is engaged in the development, exploration and production of oil and natural gas in western Canada."


GREY:WFREF - Post by User

Comment by Sumcan2on Feb 11, 2015 11:32am
282 Views
Post# 23418180

RE:LRE Bank debt covenants

RE:LRE Bank debt covenantsI calculated a cash flow for a 12 month period using 32000 boe/d and 43% oil, 57% NG, oil hedges of 35% @ $85us, NG hedges of 35% @$3.6 AECO. For the unhedged portion, I used $2.50 AECO and $52.50us. I used a $1.23 exchange rate for the oil. Revenue comes out at $509,788,188 and expenses of $316,500,000, which include operating costs, interest, transportation, G/A, and Royalties. With the lower production rates, operating costs / barrel could be higher than what I used $13.5/barrel. The cash flow for the year works out to $193,328,188 Bank debt is $632,377,000 from 3rd quarter statement. So ratio is 3.27 for bank debt and 3.67 for total debt. I looked a month ago on SEDAR and found the only reference to the covenants delt with the interest rate and was pegged to the ratios, the higher the ratio the higher the interest rate. It didn't spell out the consequences of being in non-compliance of the covenants.
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