Athabasca Oil Corp said on Monday its lenders have reduced the maximum amount the company can borrow against the value of its untapped oil and gas reserves.
Reserve-based lending (RBL) allows producers like Athabasca to borrow money against the value attached to the undeveloped reserves of oil and gas they possess. Lenders review these facilities periodically as the value of those assets fluctuates.
With the recent crash in oil prices, producers across North America face a difficult redetermination season and many others have also had their RBLs reduced or are preparing for it.
Athabasca said the facility, reduced to $42 million, has been renewed until November 20, 2020.
The company also said it continues to pursue opportunities to access credit support, with Prime Minister Justin Trudeau saying Canada will invest $2.5 billion in measures to help the hard-hit oil and gas industry during the COVID-19 pandemic.
As of May 31, the company had cash and cash equivalents of approximately $330 million, inclusive of restricted cash.
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