CALGARY, ALBERTA--(Marketwired - Jan 31, 2017) - Virginia Hills Oil Corp. ("Virginia Hills" or the "Company") (TSX VENTURE:VHO) announces that its syndicated credit facility (the "Credit Facility") has matured and remains unpaid as of January 31, 2017. The failure to repay the approximate $95.6 million principal amount owing under the Credit Facility on January 31, 2017 constitutes an event of default under the Credit Facility and entitles the lenders to, among other things, enforce their security and appoint a receiver to manage the affairs of the Company. An event of default under the Credit Facility is also an event of default under the credit facility of Dolomite Energy Inc., the Company's wholly-owned subsidiary. Virginia Hills has previously disclosed certain financial and non-financial covenant breaches under the Credit Facility in its year end 2015 and interim 2016 financial statements. Although the lenders have not enacted any of the remedies in relation to the current event of default and past covenant breaches, they have reserved their available rights and remedies in respect thereof. The Company is currently in negotiations with the lenders of the Credit Facility for an extension to allow Virginia Hills to continue its strategic review process, however, there is no certainty as to whether an extension will be obtained from the lenders and if so, on what terms.
As previously announced on August 26, 2016, Virginia Hills initiated a process to review strategic alternatives with a view of maximizing the value of the Company's significant Slave Point light oil resource base. The Company does not have any further update at this time as it continues to evaluate different alternatives in light of its current financial position. Any strategy, if taken, is subject to material uncertainty and could have a material impact on the Company's financial position and results of operations. Virginia Hills does not intend to disclose developments with respect to this process unless and until the board of directors of the Company has approved a definitive transaction or other course of action or otherwise deems that disclosure of developments is appropriate or otherwise required by law. There are no guarantees that the process will result in a transaction or, if a transaction is entered into, as to its terms or timing.
About Virginia Hills
The Company is a Calgary based oil and gas company with operations in the Red Earth area of Alberta. Virginia Hills' shares are listed on the TSX Venture Exchange under the symbol "VHO".