Ensign Energy amends, extends C$900 million revolving credit facility

By Cady Vishniac

Detroit, Dec. 31 – Ensign Energy Services Inc. amended and extended its C$900 million revolving credit facility on Thursday, according to a press release.

The new maturity date of the revolver is Nov. 25, 2022, provided that on or before Sept. 30, 2021, the maturity on the company’s convertible debentures is extended at least to Feb. 26, 2023 from Jan. 22, 2022. If the convertibles’ maturity date is not extended, then the maturity date of the revolver will be amended to Nov. 29, 2021.

Amendments to the revolver’s financial covenants include:

• Elimination of the consolidated total debt to consolidated EBITDA ratio and its replacement with a $140 million minimum consolidated EBIDTA requirement;

• A required consolidated EBITDA to consolidated interest expense of at least 1.75x for the fourth quarter of 2020, 1.5x for the first through third quarters of 2021, 1.75x for the fourth quarter of 2021, 2x for the first quarter of 2022, 2.25x for the second and third quarters of 2022 and 2.5x thereafter;

• A consolidated senior debt to consolidated EBITDA ratio not exceeding 3.5x for the fourth quarter of 2020, 4x for all quarters of 2021, 3.5x for the first quarter of 2022, 3.25x for the second and third quarters of 2022 and 3x thereafter; and

• Reduction of permitted encumbrances to $25 million from $75 million.

A maximum aggregate repurchase price of $25 million has also been announced for the repurchase or redemption of the company’s senior notes and convertible debentures, with the following exceptions:

• The company proves to its lenders that it would hold $175 million in cash and available credit on its credit facilities after completing the transaction;

• The aggregate redemption or repurchase price of all the notes and debentures repurchased or redeemed does not exceed one-third of the company’s net proceeds from permitted dispositions completed after Jan. 1 plus one-third of net proceeds received from permitted dispositions completed between Dec. 10 and Jan. 1 to the extent that such net proceeds have not been used to repurchase or redeem senior notes between the same period; or

• The senior notes to be repurchased or redeemed have a redemption or purchase price up to the aggregate amount of net proceeds from the issuance of new subordinated debt.

Ensign Energy Services is an oilfield services contractor based in Calgary, Alta.

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