Argent Energy Trust (Toronto: AET.UN) has announced that its banking syndicate has completed its previously announced redetermination of the Calgary-based trust's credit facility. Its credit facility borrowing base has been adjusted to $140 million, from the previous limit of $160 million, reflecting the asset sales undertaken in August and the revised independent reserves report as at September 30, 2014. The trust is currently only $103 million drawn on its facility and is in full compliance with all covenants. The next credit facility review is due in May 2015 .
The financial flexibility provided by its credit facility is further supported by Argent's hedging program. For 2015, Argent has 2,000 net bbl/d of oil hedged at WTI oil prices of $90/bbl equivalent or higher and 6,000 net mmbtu/d of natural gas hedged at an average price of $4.12 /mmbtu. This enhances the 2015 operating cashflow in the current commodity price environment.
The previously announced strategic review process is ongoing with a data room open, whereby the board will consider all alternatives to increase unitholder value, including: a sale of a material portion of the assets of the trust; a sale of the trust, either in one transaction or in a combination of transactions; a merger or other business combination; or a joint venture or a farmout on a material portion of the assets. The board has determined that exploring strategic alternatives is the best course of action in order to maximize unitholder value. Argent cautions that there can be no assurances that this strategic review process will result in an acceptable transaction of any form.
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