Enterra Energy Trust Reduces Total Bank Debt by $76.5MM

Enterra reduced its total bank debt by an additional $7.3 million during the fourth quarter of 2008, for a total reduction of $76.5 million in the year.

"Contributions from our hedging position in the fourth quarter of 2008 helped us to enter 2009 with a stronger balance sheet, despite severe declines in commodity prices during the period," commented Don Klapko, President and Chief Executive Officer. "Our bank debt level is well in hand and this puts us in a healthy position to take advantage of alternative investment opportunities which may compete with our drilling inventory, given the current market conditions."

Enterra's current bank lending is considerably below its approved borrowing base. This borrowing base is under its semi-annual review and management is confident that any retraction of the borrowing base due to lower commodity prices will not have a material impact on Enterra's business. Due to the floating interest rate structure on the existing credit facilities, Enterra's bank interest expenses are currently at historical lows near 2.5 percent.

Enterra also has outstanding debentures with a face value of $120.3 million. These debentures are a form of long term debt with maturities in 2011 ($80.3 million) and 2012 ($40.0 million). They can be paid out or converted to equity at their respective maturities.

Blaine Boerchers, Chief Financial Officer added, "Our improved cash position and available credit facility have put us in reasonably good shape to deal with the economic uncertainties that are in front of us. We are constantly reassessing our capital spending and operational plans to ensure that we achieve the best returns possible, while working within our available cash flow."


 

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