The Zephyr Energy PLC (LON: ZPHR) share price edged higher after the successful completion of the semi-annual redetermination of its revolving credit facility (RCF) by its lender, First International Bank and Trust (FIBT), which is based in North Dakota.
The Rocky Mountain oil and gas company revealed that the redetermination exercise had resulted in a 30% increase to its existing revolving credit facility, which was raised to $13 million. The company had already drawn $8 million from the RCF before the determination exercise. As a result, it now has room to borrow $5 million under the credit facility.
Zephyr Energy revealed that it has ner liquidity of about $18.5 million, considering the amount it can borrow under the RRCF and its existing cash reserves. The oil and gas company also informed the public that it had an extra debt of $15.8 million apart from the RCF. The debt is primarily composed of a senior term loan from FIBT.
Today’s release was impressive, given First International Bank and Trust (FIBT) ’s significant exposure to Zephyr Energy when you combine the term loan and the revolving credit facility. Yet, the bank saw it fit to increase Zephyr’s borrowing capacity under the RCF.
Colin Harrington, Zephyr Energy’s CEO, said: “The successful redetermination and resulting 30% increase to the RCF borrowing base is an excellent testament to the strength of Zephyr’s underlying assets – and the increased debt capacity is particularly notable in light of the Company’s production revenues of over US$25 million during the first half of 2022.”
Adding:
“We expect to continue to generate strong free cash flow for the foreseeable future, which in turn will fund the planned expansion of both our operated and non-operated asset portfolios. I would like to thank FIBT, a regional bank with over 110 years of history in North Dakota, and its team for their continued strong support of Zephyr.”
However, investors barely reacted to the news, which did not immediately impact the company’s finances, except for providing additional fiscal headroom.
*This is not investment advice.
Zephyr Energy share price.
The Zephyr Energy share price edged 2.83% higher to trade at 5.81p, rising from Wednesday’s closing price of 5.65p.