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Edge Resources (EDG)

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Thursday 24 July, 2014

Edge Resources

New Credit Facility

RNS Number : 1750N
Edge Resources Inc.
24 July 2014
 



FOR IMMEDIATE RELEASE

TSX Venture Exchange Symbol: EDE

AIM Exchange Symbol: EDG                                                                                               July 24, 2014

EDGE RESOURCES INC.                                                                                               Calgary, Alberta

 

Edge Resources Inc. Doubles Credit Facilities and Lowers Financing Cost

 

Edge Resources Inc. ("Edge" or the "Company") is very pleased to announce that it has agreed 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 ("National Bank Facility").

The Facility will carry an interest rate of the Canadian prime rate ("Prime Rate") plus 1.75% per annum. This is significantly lower than the existing National Bank Facility which carried an interest rate of Prime Rate plus 3% per annum.  The New Revolving Facility is secured against the assets of the Company and is a borrowing base facility that is determined upon 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 programme in Eye Hill, infrastructure projects that aim to lower our operating costs and/or short-fuse, opportunistic acquisitions."

 

For more information, visit the company website: www.edgeres.com or contact:

 

Brad Nichol, President and CEO                                                                   Phone +1 403 767 9905

 

Sanlam Securities UK Limited, Nominated Adviser & Joint Broker                    Phone +44 (0) 207 628 2200

Simon Clements / James Thomas / Max Bascombe

 

SP Angel Corporate Finance LLP, Joint Broker                                              Phone +44 (0) 203 463 2260

John MacKay / Richard Hail / Stuart Gledhill / Zac Phillips (Research)

 

 

About Edge Resources Inc.

 

Edge Resources is focused on developing a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada.  Management has focused consistently 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 high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, giving Edge Resources a sustainable, low-cost, competitive advantage.

 

** "working capital ratio" and "senior debt to cash flow ratio" are not IFRS defined terms.  These are commonly used Canadian E&P lender terms, defined in detail in the Facility Agreement.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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