Compton announces amendment to credit facility and engagement of financial advisor

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[{"type":"text","content":"\n\n\n\n\n\nCALGARY, April 9, 2012 /CNW/ - Compton Petroleum Corporation (TSX - CMT)\n announced receipt of notice from the lenders (\"Lenders\") of a reduction\n in the credit available under its credit facility (the \"Facility\") from\n $140.0 million to $110.0 million, with any excess drawn over the\n available amount due May 7, 2012. The Lenders have indicated they are\n supportive of the Corporation's plans to explore recapitalization\n options as outlined below. The due date may be extended, at the\n discretion of the Lenders, based on Compton's progress with its\n recapitalization.\n\n\nThe Facility's borrowing base is determined by the Lenders on the basis\n of the Corporation's reserve report, operational results, and the\n Lenders' view of the economic environment and of current and forecasted\n commodity prices, amongst other things.  The reduction follows the\n semi-annual review of Compton's borrowing base by the Lenders and is\n primarily driven by a lower natural gas price forecast: spot natural\n gas prices have fallen by more than 30% over the last three months and\n by more than 40% over the last six months.  The $140.0 million\n Facility, including a working capital facility of $15.0 million and a\n syndicated facility of $125.0 million, is fully drawn and includes $0.8\n million in letters of credit. Compton currently holds approximately\n $8.8 million in cash.\n\n\nCompton's bank debt has risen from $103.1 million at the end of the\n third quarter of 2011 as a result of development capital spending of\n approximately $35.0 million committed earlier in 2011. Compton's\n current net debt of approximately $166.0 million is comprised of the\n Facility of $140.0 million, and $29.2 million in respect of the MPP\n term financing, net of a working capital surplus of $3.2 million. In\n addition, the Corporation's in-the-money hedges have an unrealized cash\n value of about $6.0 million.\n\n\nIn late 2011, Compton's new senior management and Board re-focused the\n Corporation's strategy to recognize the prevailing natural gas price\n environment. Compton is currently generating positive cash flow from\n operations that is allocated to its planned maintenance capital\n expenditure program. As funds become available, Compton plans to\n selectively invest in its liquids rich natural gas and oil\n opportunities ...

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