Surge Energy closes C$280 million in two new debt facilities

By Wendy Van Sickle

Columbus, Ohio, Dec. 9 – Surge Energy Inc. closed a C$130 million five-year term debt facility and a new normal course C$150 million first-lien credit facility with a revised syndicate of five lenders, according to a news release.

Concurrent with the closing of the new facilities, the company repaid its C$42 million, non-revolving BDC term loan from the Business Development Bank of Canada.

The new five-year term loan has annual interest of 8.85%. The lenders have to option to expand the loan by C$30 million through 2022.

Most of the term loan will be used to repay Surge’s existing first-lien revolving bank debt, the repayment of the BDC facility and the acquisition of certain oil infrastructure previously leased by the company.

The new first-lien credit facility is a normal course, reserve-based credit facility available on a revolving basis through Nov. 30, 2022, with biannual borrowing base redeterminations and term maturity of Nov. 30, 2023.

The company expects to have C$100 million drawn on the first-lien credit facility at Dec. 31.

Surge said it will continue to focus on reducing debt leverage over the next six months and is targeting the reinstatement of its sustainable dividend model in mid-2022

Surge Energy is a Toronto-based junior/intermediate oil and gas company.

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