Stampede Drilling Inc. announced the closing of a loan facility in an amount of up to $2 million pursuant to a letter of offer dated October 28, 2020 with the Business Development of Canada ("BDC"). The BDC Facility has an interest rate equal to BDC's floating base rate, currently at 4.55%, a maturity date of September 1, 2023, and comes with customary representations, warranties and covenants.

The Company also granted BDC a security interest (the "BDC Security Interest") in all present and after-acquired property, except consumer goods, accounts receivable and inventory. BDC, HSBC Bank Canada ("HSBC") and the Company have also entered into a priority agreement, whereby the BDC Security Interest is postponed and subordinated to the security interests held by HSBC in the personal property of the Company in connection with the facility letter dated December 20, 2018 from HSBC to the Company, as acknowledged and agreed to by the Company on December 20, 2018 (the "HSBC Facility").  

The Company has also announced an amendment to its existing credit agreement, including adjustments to, and suspension of, certain debt covenant thresholds with HSBC (the "HSBC Amendment") commencing on December 31, 2020 until December 31, 2021, as well as other amendments to reflect the establishment of the BDC Facility. While the Company has not breached any covenants, management felt that in light of the ongoing negative impact on 2020 drilling activity from the COIVID-19 pandemic and depressed oil prices, it was prudent to make these amendments to provide the Company with additional financial assurance and flexibility as it navigates the Unprecedented uncertainties in the present environment.

In commenting on these initiatives, Lyle Whitmarsh, President and Chief Executive Officer, noted: "The addition of the BDC Facility and HSBC Amendment, combined with the extensive cost cutting initiatives implemented in Q1 2020, will help provide the Company the appropriate level of flexibility to strategically manage the business through this global pandemic and positions the Company well for a market recovery."