CALGARY, ALBERTA--(Marketwire - June
11, 2009) - Enterra Energy Trust's ("Enterra",
"We", "Our" or the "Trust") annual credit
facility renewal process has been completed with its Bank Syndicate
lenders, The Bank of Nova Scotia, HSBC Bank Canada and Union Bank of
California. The credit facility revolving period has been renewed until
June 25, 2010 and has a further one year term out provision beyond
that.
Don Klapko, Enterra's Chief Executive Officer commented, "Since
late 2007, we have been focused on paying down our debt, and as a
result of our success, we're now able to use our improved balance sheet
to renew Enterra's credit facilities on solid terms. We've also
eliminated our second lien credit facility. We implemented a normal
course issuer bid for the Trust's convertible debentures recently,
aimed at further reductions to borrowing. These are all important steps
in our overall plan to improve our balance sheet. The Trust's
strengthened financial position provides us with the flexibility to
pursue external and internal opportunities as they arise."
Blaine Boerchers, Enterra's Chief Financial Officer said, "We have
worked hard to build a strong relationship with our lenders and we view
this renewal as a sign of our success on that front. The terms are very
competitive in today's credit and business environment."
As reported in Enterra's Q1 financial report, the borrowing base review
resulted in Enterra's reserves supporting a borrowing base of $110.0
million based on current commodity prices. Enterra's credit facility
was first negotiated in May 2008, when commodity prices were
substantially higher. The Trust's current borrowing is at less than $80
million or around 70 percent of the maximum borrowing base.
The interest rate on the renewed credit facilities is Bankers
Acceptance or LIBOR rate plus 3.00%. The actual rate will be determined
quarterly according to a grid based on the ratio of bank debt to cash
flow. As this ratio is currently less than 1.00 to 1.00, the lowest
interest rate of the grid currently applies. The interest rate on the
senior facility is estimated to be 3.7% effective June 2009.
Under the terms of the renewed credit facility, the Trust must maintain
an interest coverage ratio of more than 3.00 to 1.00 with no other
restrictions or covenants on the use of cash flows. The interest
coverage ratio as at March 31, 2009 was 7.19 to 1.00 which is well
above the minimum requirement.
The second-lien facility, which had been in place but was never drawn,
has been terminated at Enterra's request.
About Enterra Energy Trust
Enterra is an exploration and production oil and gas trust based in
Calgary, Alberta, Canada with its United States operations office
located in Oklahoma City, Oklahoma. Enterra's trust units and
debentures are listed on the Toronto Stock Exchange under the symbols
(TSX:ENT.UN) (TSX:ENT.DB) (TSX:ENT.DB.A) and Enterra's trust units are
listed on the New York Stock Exchange under the symbol (NYSE:ENT). The
Trust's portfolio of oil and gas properties is geographically diversified
with producing properties located principally in Alberta, British
Columbia, Saskatchewan and Oklahoma. Production is comprised of
approximately 58 percent natural gas and 42 percent crude oil and
natural gas liquids. Enterra has compiled a multi-year drilling
inventory for its properties.
Forward-Looking Statements
Certain information in this press release constitutes forward-looking
statements under applicable securities law. Any statements that are
contained in this press release that are not statements of historical
fact may be deemed to be forward-looking statements. Forward-looking
statements are often identified by terms such as "may,"
"should," "anticipate," "expects,"
"seeks" and similar expressions. Forward-looking statements
necessarily involve known and unknown risks, including, without
limitation, risks associated with oil and gas production; marketing and
transportation; loss of markets; volatility of commodity prices;
currency and interest rate fluctuations; imprecision of reserve estimates;
environmental risks; competition; incorrect assessment of the value of
acquisitions; failure to realize the anticipated benefits of
acquisitions or dispositions; inability to access sufficient capital
from internal and external sources; changes in legislation, including
but not limited to income tax, environmental laws and regulatory
matters. Readers are cautioned that the foregoing list of factors is
not exhaustive.
Readers are cautioned not to place undue reliance on forward-looking
statements as there can be no assurance that the plans, intentions or
expectations upon which they are placed will occur. Such information,
although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may differ
materially from those anticipated. Forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
Additional information on these and other factors that could affect
Enterra's operations or financial results are included in Enterra's
reports on file with Canadian and U.S. securities regulatory
authorities and may be accessed through the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov), Enterra's website (www.enterraenergy.com) or by contacting Enterra. Furthermore, the forward looking
statements contained in this news release are made as of the date of
this news release, and Enterra does not undertake any obligation to
update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or
otherwise, except as expressly required by securities law.
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