Cona announces debt reduction, asset disposition program
Cona Resources Ltd. today announced debt reduction and a certain asset disposition program, having reduced a term loan to $140 million.
Cona’s capital structure includes a $325.0 million credit facility and a term loan that matures on July 28, 2020. At December 31, 2017, $188.4 million was drawn on the Company’s credit facility and, during the fourth quarter of 2017, Cona reduced the outstanding term loan to $140 million from $160 million.
Cona has identified a number of assets that, if sold, “will provide the opportunity to further reduce the Company’s outstanding debt,” according to the company press release.
Cona recently completed the sale of a minor property for proceeds of approximately $7.5 million (subject to final adjustments). Cona is planning to market additional attractive assets, including the Winter, Court and Plover Lake Thermal properties, and has retained Scotiabank Global Banking and Markets to assist with the process.
Cactus Lake, Cona’s largest property by production and reserves, continues to generate free cash flow and benefits from near zero base decline rates (excluding production from new wells drilled in the last 12 months) due to favourable waterflood and polymer flood response. Cactus Lake generated approximately 70 per cent of the company’s field operating income and produced 8,775 boe/d in the third quarter of 2017.
With a growing production base, Cactus Lake is one of the company’s core assets.
Cona’s operations, infrastructure and concentrated land position are focused in southwest Saskatchewan.
(Cona Resources Ltd.)