Encore Acquisition Company(“EAC,” “Encore,” or the “Company”) and Encore Energy Partners LP(“ENP”) announced today that the syndicate of lenders underwriting the EAC and ENP revolving credit facilities reaffirmed the respective company’s borrowing bases as a result of completing the spring semi-annual redetermination. As previously announced, EAC elected to monetize certain of its 2009 oil derivative contracts, resulting in proceeds of approximately $190.4 million, which were used to reduce outstanding borrowings under its revolving credit facility. EAC’s borrowing base of $1.1 billion was adjusted by $200 million solely as a result of the hedge monetization. Therefore, the revised borrowing base of $900 million allows the Company the same amount of borrowing capacity after the redetermination as before. Concurrent with the EAC redetermination, the syndicate of lenders underwriting the ENP revolving credit facility reaffirmed its $240 million borrowing base. The next borrowing base redetermination for both EAC and ENP is scheduled for October 2009.
Bob Reeves, Senior Vice President and Chief Financial Officer, commented, “Our strong balance sheet, substantial liquidity, shallow declining properties, and nimble budget have allowed us to uniquely position Encore for 2009. We removed our 2009 oil hedges at EAC for a substantial gain that we then applied to our outstanding debt balance. In the event oil prices move higher, we will benefit from higher cash flows that can be applied to further reduce debt or apply to a robust drilling inventory. If oil prices weaken, we can adjust the capital budget accordingly because of our stable production base and lack of long-term drilling contracts. Either way, Encore is one of only a few companies that will be stronger exiting 2009 and well positioned for opportunities in 2010.”
About the Company
Encore Acquisition Company is engaged in the acquisition and development of oil and natural gas reserves from onshore fields in the United States. Since 1998, Encore has acquired producing properties with proven reserves and leasehold acreage and grown the production and proven reserves by drilling, exploring, reengineering or expanding existing waterflood projects, and applying tertiary recovery techniques.
Source: biz.yahoo.com
Bob Reeves, Senior Vice President and Chief Financial Officer, commented, “Our strong balance sheet, substantial liquidity, shallow declining properties, and nimble budget have allowed us to uniquely position Encore for 2009. We removed our 2009 oil hedges at EAC for a substantial gain that we then applied to our outstanding debt balance. In the event oil prices move higher, we will benefit from higher cash flows that can be applied to further reduce debt or apply to a robust drilling inventory. If oil prices weaken, we can adjust the capital budget accordingly because of our stable production base and lack of long-term drilling contracts. Either way, Encore is one of only a few companies that will be stronger exiting 2009 and well positioned for opportunities in 2010.”
About the Company
Encore Acquisition Company is engaged in the acquisition and development of oil and natural gas reserves from onshore fields in the United States. Since 1998, Encore has acquired producing properties with proven reserves and leasehold acreage and grown the production and proven reserves by drilling, exploring, reengineering or expanding existing waterflood projects, and applying tertiary recovery techniques.
Source: biz.yahoo.com
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