Edge Resources Inc.

Edge Resources Inc.

July 24, 2014 08:45 ET

Edge Resources Inc. Doubles Credit Facilities and Lowers Financing Cost

CALGARY, ALBERTA--(Marketwired - July 24, 2014) - Edge Resources Inc. (TSX VENTURE:EDE)(AIM:EDG) ("Edge" or the "Company") is very pleased to announce that it has entered into a new revolving demand loan facility of up to $17 million (the "Facility") with ATB Corporate Financial Services ("ATB"). This Facility more than doubles the Company's existing credit facilities, and replaces its previous $8 million facility with National Bank of Canada, which was originally entered into on February 28, 2012 (the "National Bank Facility").

The Facility will carry an interest rate of the Canadian prime rate ("Prime") plus 1.75% per annum. This rate is significantly lower than that of the existing National Bank Facility which carried an interest rate of Prime plus 3% per annum. The new Facility is secured against the assets of the Company and is a borrowing base facility that is determined with reference to an independent engineering report from an engineering firm acceptable to ATB on all material hydrocarbon interests, including royalty interests, of the Company.

The Facility contains standard commercial covenants for facilities of this nature, including a requirement for the Company to maintain a working capital ratio** of not less than 1:1 and a senior debt to cash flow ratio** of not more than 3:1.

The Company has currently drawn only $6.3 million on the Facility, leaving significant headroom.

Brad Nichol, President and CEO of Edge commented, "This is a significant development for Edge and vastly improves our financial flexibility. This is a tremendous show of confidence from one of the biggest lenders to Canadian Junior Oil and Gas companies. The new facility also drastically reduces our cost of capital and provides us with a much larger pool of funds with which to fund new projects such as the acceleration of our drilling program in Eye Hill, infrastructure projects that aim to lower our operating costs and/or short-fuse, opportunistic acquisitions."

Additional information may also be available at www.edgeres.com or www.sedar.com.

About Edge Resources Inc.

Edge Resources is focused on developing its heavy oil properties within a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada. Management has consistently focused on:

  1. Shallow, vertical, conventional programs with reduced capital, operational and geological risks
  2. Very high or 100% working interests and fully operated assets
  3. Pools and horizons with exceptionally high reserves in place

The management team's very high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, which gives Edge Resources a sustainable, low-cost, competitive advantage.

** "working capital ratio" and "senior debt to cash flow ratio" are not IFRS defined terms. These are commonly used Canadian E&P lender terms, defined in detail in the Facility Agreement.

Forward-Looking Statements

This news release includes certain information, with management's assessment of Edge's future plans and operations, and contains forward-looking statements which may include some or all of the following: (i) anticipated production rates; (ii) expected results of capital programs; (iii) expected timelines for production optimization; (iv) net debt levels; (v) anticipated operating costs; and (vi) expected capital projects and associated spending; which are provided to allow investors to better understand the Company's business. By their nature, forward-looking statements are subject to numerous risks and uncertainties; some of which are beyond Edge's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, changes in environmental tax and royalty legislation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, and other risks and uncertainties described under the heading 'Risk Factors' and elsewhere in the Company's Management Discussion and Analysis and other documents filed with Canadian provincial securities authorities and are available to the public at www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The principal assumptions Edge has made includes security of land interests; drilling cost stability; finance and debt markets continuing to be receptive to financing the Company, the ability of the Company to monetize non-core assets and industry standard rates of geologic and operational success. Actual results could differ materially from those expressed in, or implied by, these forward-looking statements. Edge disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Trading in the securities of Edge Resources Inc. should be considered highly speculative. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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