VAALCO Energy Inc. (NYSE: EGY) confirms that the borrowing base under its revolving credit facility was set at $20.1 million, effective Dec. 31, 2015. The redetermination was a result of the regular semi-annual review conducted by the International Finance Corp. (IFC), the lender under the facility. All covenants under the facility remain unchanged.
The borrowing base is supported solely by the company's Etame Marin producing assets in Gabon. The next scheduled redetermination date is at June 30. Currently, the company has $15 million drawn under this facility which was also the amount drawn at Dec. 31, 2015. The IFC communicated to the company that, if VAALCO were to seek additional drawdowns before the next redetermination, the IFC could elect, under the terms of the loan agreement, to conduct an interim redetermination which it believes would result in a borrowing base of less than $20.1 million due to commodity prices being lower today than they were at Dec. 31, 2015.
Steve Guidry, VAALCO's CEO, commented, "The significant downturn in oil prices was the primary reason that the IFC decided to lower our borrowing base. We are actively exploring a variety of options to supplement VAALCO's potential liquidity needs in conjunction with our strategic alternatives review process announced Jan. 26."
VAALCO Energy is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil. The company's properties and exploration acreage are located primarily in Gabon, Angola, and Equatorial Guinea in West Africa.