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Paramount Resources Announces Amended Credit Facility

Source: 6/30/2020, Location: North America

Paramount Resources Ltd. has successfully completed amendments to its senior secured revolving bank credit facility (the “Facility”) with the unanimous support of its nine-bank syndicate.

The amendments include a full waiver of the Senior Secured Debt to Consolidated EBITDA covenant until the third quarter of 2021 and a reduction of the Consolidated EBITDA to Consolidated Interest Expense covenant from 2.50x to 1.75x for the fourth quarter of 2020 (on a trailing 12-month basis) and for the first two quarters of 2021 (on a current quarter basis).

Reflective of the macro economic environment and significant reduction in commodity prices, the size of the Facility has been amended to $1.0 billion. Facility availability in excess of $900 million is subject to the Company raising junior capital and obtaining required levels of lender approval. Availability will be increased by $5 million for each $10 million of junior capital raised, subject to certain limits. The November 2022 maturity date of the Facility remains unchanged.

Current drawings on the Facility are approximately $760 million. The amended Facility provides Paramount with the flexibility and liquidity to execute its capital program. Activities remain focused in the Grande Prairie Region, where recent and significant reductions in cost structure have further enhanced both payouts and rates of return. The Company remains well positioned to capture the value of its extensive asset base as commodity prices recover. Consistent with its long-term strategy, Paramount also continues to opportunistically pursue non-core property dispositions with a focus on maximizing value.

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