Petrowest Corporation has entered into a new three-year credit agreement with Bank of Montreal and a syndicate comprised of Royal Bank of Canada, ATB Financial and Canadian Western Bank (the "New Facility"). The new facility includes a $50 million revolving reducing term loan (which has been drawn to $38.0 million) and a $40 million revolving credit facility (which has been drawn to $20.0 million). The new facility also has an accordion feature which may increase availability under either the term loan or the revolving credit facility by a maximum of $30 million, subject to borrowing base availability.

The interest rates for the term loan and the revolving credit facility under the new gacility are, at the election of Petrowest, the prime rate or the discount rate for bankers' acceptances plus an applicable margin based on Petrowest's leverage position. The amortization period for the term loan under the New Facility is six years, with quarterly scheduled repayments.

The new facility requires Petrowest to comply with customary covenants including, among others, financial covenants that provide that Petrowest may not: (a) make unfinanced capital expenditures for any fiscal year in excess of $21.0 million; (b) have a leverage ratio greater than 2.50:1; (c) have a consolidated fixed charge coverage ratio less than 1.25:1; (d) have a working capital ratio less than 1.25:1; and (e) secure finance lease liabilities in excess of $25.0 million.

Petrowest is an Alberta corporation involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers.  Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia.