Business Context and Reporting Period
Company: Gran Tierra Energy Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 30, 2013
Event: Entry into a Material Definitive Agreement and creation of a direct financial obligation.
Key Financial Metrics and Debt Structure
This filing details the establishment of a new credit facility rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
| Metric | Value |
|---|---|
| Total Credit Facility Size | $300,000,000 |
| Initial Borrowing Base | $150,000,000 |
| Maximum Borrowing Base | $300,000,000 |
| Letter of Credit Sub-limit | $30,000,000 |
| Maturity Date | August 30, 2016 |
| Interest Rate (Eurodollar) | Rate + 2.25% to 3.25% (based on utilization) |
| Interest Rate (Alternate Base) | Rate + 1.25% to 2.25% (based on utilization) |
| Undrawn Commitment Fee | 0.875% per annum |
| Letter of Credit Fee | 0.250% per annum |
Material Changes and Conditions
The primary material change is the execution of a Credit Agreement with Wells Fargo Bank, National Association, as administrative agent. Key conditions include:
- Borrowing Base Determination: Availability is based on proven reserves and is subject to semi-annual re-determination via reserve evaluation reports.
- Conditions Precedent: Borrowing is subject to the satisfaction of conditions precedent set forth in the Credit Agreement.
- Covenants: The company must maintain compliance with specified financial and operating covenants.
- Collateral: The facility is secured by ancillary agreements including guarantees, equitable charges over subsidiary shares, general security agreements, and securities pledge agreements covering entities such as GTEIH, Solana Resources Limited, and Gran Tierra Exchangeco Inc.
Guidance, Outlook, and Risks
The filing does not provide specific revenue guidance, management commentary on future operations, or a discussion of general business risks beyond the terms of the credit agreement. The primary contingency noted is that the borrowing base is variable and dependent on future reserve evaluations.
Investor Verification Checklist
- Verify the specific "conditions precedent" required to draw on the initial $150,000,000 borrowing base.
- Review the detailed financial and operating covenants in the full Credit Agreement (Exhibit 10.1) to understand potential default triggers.
- Monitor future reserve evaluation reports to assess potential changes to the borrowing base between the initial $150 million and the $300 million maximum.
- Confirm the status of the collateral agreements and the specific subsidiaries pledged as security.