The credit facility includes the following covenants, which will be tested on a quarterly basis:
As at September 30, 2014 we were in compliance with all quarterly covenants.
The credit facility also includes an annual cap on general and administrative expenditure of $6,000,000, commencing the twelve months ended December 31, 2014.
While we expect to be in compliance with these covenants based on our current debt levels, if we are not in compliance with the financial covenants in the credit facility, or if we do not receive a waiver from the lender, and if we fail to cure any such noncompliance during the applicable cure period, the due date of our debt could be accelerated by the lender. In addition, failure to comply with any of the covenants under our credit facility could adversely affect our ability to fund ongoing operations.
The funds drawn from our credit facility will be used to fund drilling in our North Stockyard project in North Dakota. We expect to fund our remaining capital expenditures for fiscal 2015 with cash on hand, cash flow from operations, and drawdowns of our credit facility (to the extent available). We may also elect, where we consider it reasonable and appropriate, to raise funds by the sale of selected assets.
Uncertainties relating to our capital resources and requirements include the effects of results from our exploration and drilling program and changes in oil and natural gas prices, either of which could lead us to accelerate or decelerate exploration and drilling activities. The aggregate levels of capital expenditures for our fiscal year ending June 30, 2014, and the allocation of those expenditures, are dependent on a variety of factors, including the availability of capital resources to fund the expenditures and changes in our business assessments as to where our capital can be most profitably employed. Accordingly, the actual levels of capital resources and expenditures and the allocation of those expenditures
may vary materially from our estimates.
• Current ratio greater than 1 • Debt to EBITDAX (annualized) ratio no greater than 3.5
• Interest coverage ratio minimum of 2.5 to 1.0
Plse be careful ....
rgds
V_H
SSN Price at posting:
1.2¢ Sentiment: None Disclosure: Not Held
