Canacol Energy Announces Agreement for Debtor in Possession ("DIP") Financing

Executive Summary

• Canacol Energy Ltd. entered into a DIP Credit Agreement with holders of its 5.75 % senior unsecured notes due 2028, providing up to US$45 million in new‑money term loan financing and up to US$22 million in letters‑of‑credit capacity.
• Initial funding of US$15 million is available immediately upon court approvals; the remaining US$30 million will be drawn subject to further conditions and milestones.
• Proceeds will fund ongoing operations, restructuring costs, and renewal/replacement of required letters of credit while supporting a sale/investment solicitation process under the CCAA proceedings.

Key Details

• Financing Structure:
• Term Loan Tranche – US$45 million delayed‑draw term loan (initial draw US$15 M, additional US$30 M subject to conditions).
• LC Tranche – Up to US$22 million in letters of credit for renewal/replacement of existing LCs.
• Interest & Fees: Customary DIP interest and fees; maturity June 30 2026 with a three‑month extension option (subject to conditions).
• Security: Secured by a court‑ordered super‑priority charge over all Company assets, subordinate only to a super‑priority administration charge under the CCAA.
• Use of Proceeds:
• Fund ongoing operations and restructuring expenses.
• Support renewal/replacement of required letters of credit.
• Conditions Precedent:
• Initial US$15 M draw contingent on DIP approval order from the Court of King’s Bench of Alberta and recognition by the U.S. Bankruptcy Court (Chapter 15).
• Remaining US$30 M draw contingent on a Colombian court recognition order and compliance with prescribed milestones.
• Court & Regulatory Context:
• Financing remains subject to court approvals; intended to support sale/investment solicitation under CCAA restructuring.
• Shares suspended on TSX since Nov 17 2025; delisting pending, with continued OTCID and BVC listings expected to cease after delisting.
• Investor Resources:
• Non‑public material information (MNPI) and operating summaries posted on the Monitor’s website: https://kpmg.com/ca/canacol.
• Q&A document for shareholders also available on the Monitor’s site.
• Document Availability: Full DIP Credit Agreement accessible via the Monitor’s website.

Notable Quotes

(No direct quotes were provided in the release.)