- ROK (ROK) has secured a commitment for a C$75M credit facility with a Canadian chartered bank
- The senior secured credit facility is in connection with ROK’s strategic asset acquisition in southeast Saskatchewan, announced on December 19, 2022
- The company expects to realize savings of approximately 30 per cent in lower combined interest expenses
- ROK explores for petroleum and natural gas in Saskatchewan and Alberta
- ROK Resources (ROK) is up by 6.02 per cent, trading at $0.44 per share
ROK (ROK) has secured a commitment for a C$75M credit facility with a Canadian chartered bank.
The senior secured credit facility is in connection with ROK’s strategic asset acquisition in southeast Saskatchewan, announced on December 19, 2022.
The asset spans 48,720 acres of land, which contain over 65 booked drilling locations. It is currently producing ~1,500 boe/d and is expected to provide $10 to $12M of incremental annualized net operating income.
ROK will pay $26.5M and divest its non-core southwest Saskatchewan assets to the seller.
Besides the asset acquisition, ROK will use the funds to pay out its existing $42M debt facility held by Anvil Channel Energy Solutions.
The C$75M credit facility is comprised of:
- A revolving credit facility of $22.5M with an expected initial interest rate of 8.15 per cent, contingent on the debt-to-cash flow
- A non-revolving term loan of $52.5 million, amortized over no less than two years, with an interest rate of Canadian Bankers’ Acceptance Rate plus 6.25 per cent
ROK expects to realize savings of approximately 30 per cent in lower combined interest expenses.
The facility is subject to a definitive agreement and customary closing conditions, as well as the closing of the asset acquisition, which is planned on or before January 24, 2023.
ROK explores for petroleum and natural gas in Saskatchewan and Alberta.
ROK Resources (ROK) is up by 6.02 per cent, trading at $0.44 per share as of 11:56 am ET.