The level of committed initial availability is based on the Company's oil and natural gas reserves, as assessed by GLJ Petroleum Consultants, the Company's independent petroleum engineer, as at December 31, 2006 and as adjusted by the Bank to incorporate cumulative production in the current year. The remainder of US$40 million may be available, within the established term, if the Bank determines from time to time that the oil and natural gas reserves of the Company support additional lending amounts and the total commitment under the facility is increased. Among other conditions, the amount available under the facility is subject to a semi-annual review, with the next review to be based on the Company's 2007 year-end reserve report scheduled for completion in late February or early March 2008.
The Company does not presently expect to draw on this facility before year-end, but may be required to access funds if the current asset backed commercial paper situation in Canada is not resolved in a timely manner. Petrolifera advised that a total of $37.7 million is presently overdue and owed to the Company by Apsley Trust and MMAI-I Trust. Petrolifera continues in its efforts to recover these funds in a timely manner. The Company also continues to monitor the situation closely and will provide updates when and if appropriate.
Petrolifera is currently of the opinion that it has the production, sales, cash flow and cash balances in other bank accounts in Argentina and Barbados to carry out its budgeted programs for the next several months, without accessing this new facility.
Petrolifera Petroleum Limited is a Calgary-based crude oil and natural gas exploration, development and production company. It is active in the Neuquén Basin, Argentina; in the Maranon and Ucayali Basins onshore Peru; and holds concessions onshore Colombia. The Company's shares are listed for trading on the Toronto Stock Exchange under the symbol PDP.
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