Shares of Bankers Petroleum (TSX: T.BNK, Stock Forum) climbed more than 17% to $1.35 Wednesday, after the company announced that it has entered into negotiations with the International Finance Corporation and the European Bank for Reconstruction and Development for a reserve-based long-term financing of up to US$110 million.
The financing will be used to fund upcoming capital requirements and working capital needs for the company's Albanian projects, says the company, and is expected to be in place during the second quarter of 2009.
The credit facility is expected to consist of two six-year revolving facilities of US$50 million each, and two eight-year term loans, totalling US$10 million, to be used for environmental remediation purposes.
The US$10 million term loan will be available after preparation and finalization of an environmental remediation action plan by Bankers, while the first US$50 million tranche of the revolving facility will be fully available when the Brent oil price stabilizes above US$55 per barrel, with the second tranche available when Bankers' production exceeds 10,000 bopd and the Brent oil price stabilizes above US$62 per barrel.
"This new credit facility, in conjunction with the Company's existing US$35 million credit facility, funds generated from operations, potential warrent exercise proceeds and cash on hand, will provide the basis to expand its capital development program when confidence returns to the energy sector and higher oil prices are realized,” said Abby Badwi, president and CEO of Bankers.
“Bankers' Albanian projects have a flexible capital expenditure program that is currently focussed on high-impact, low-cost, maintenance levels for the first half of 2009. Commencing in the second half of 2009, Bankers expects to increase its activities when business conditions improve and the IFC/EBRD revolving facility is expected to become available. In addition, this strategic long-term investment by EBRD and IFC, as lenders and potential equity partners, will allow the Company continued access to competitive and sustainable financing arrangements to fund currently planned and future growth opportunities in Albania," added Badwi.
