- Oil and gas company, Bonterra Energy (TSX:BNE), has withdrawn its 2020 guidance due to the impact of a depressed oil market on its operations
- Furthermore, the company does not plan to restart any drilling activities at its oil and gas operations until the resource’s price shows signs of improvement
- Bonterra’s lending group has chosen to postpone a planned revaluation of its banking facility to May 29, allowing the company time to revaluate its financial position given the sudden market shift
- In further financial support, Bonterra has applied for the Federal Government’s Canada Emergency Wage Subsidy, as well as credit support from Export Development Canada and the Business Development Bank
- Bonterra Energy (BNE) is down 3.91 per cent, with shares trading for C$1.23 and a market cap of $41.1 million
Bonterra Energy (TSX:BNE) has withdrawn its 2020 guidance due to the impact of a depressed oil market on its operations.
Furthermore, the company does not plan to restart any drilling activities at its oil and gas operations in Alberta, Saskatchewan and British Columbia, until the oil price shows signs of improvement.
Bonterra is also considering reducing production at the sites to avoid selling at a negative price. However, thus far the company has not announced any further production cuts.
The oil price drop was initially sparked by a trade war between OPEC+ countries and Russia, earlier this year. When the countries uncapped production, the oil market was flooded, and benchmark prices dropped to historic lows.
Despite recapping production earlier this month, the oversupplied-market is now suffering from a decrease in demand caused by the COVID-19 pandemic.
The company’s lending group has postponed a planned revaluation its banking facility from April 28 to May 29.
This is to help the company manage in the difficult industry environment by making the relevant financial calculations when a less volatile market to emerges. It also allows Bonterra more time to address the impact the oil price crash has had on its operations, before commencing the review.
In further financial support, Bonterra has applied for the Federal Government’s Canada Emergency Wage Subsidy to help manage its payroll. If approved, the company would be eligible to receive 75 percent of its employee’s salaries for up to 12 weeks.
The company is also applying for credit support from Export Development Canada and the Business Development Bank, which was announced by the government earlier this month to help struggling businesses.
Bonterra Energy (BNE) is down 3.91 per cent, with shares trading for C$1.23 at 2:42am EDT.