(Reuters) - Canadian oil and gas producer Pacific Exploration and Production Corp said its lenders agreed to waive off a covenant that requires it to maintain above $1 billion in net worth, amid a slump in oil prices.
The waivers are effective for about $1.43 billion in debt facility and will terminate on Dec. 28, the company said on Tuesday.
The approval of the waivers were in the best interest of the company due to a sharp decline in crude oil prices, as it continues to reduce costs and sell non-core assets, CEO Ronald Pantin said.
Global crude oil prices have slid 59 percent since peaking in June last year, hurting several oil and gas producers and services companies.
The company, previously known as Pacific Rubiales Energy Corp, entered a two-year deal with the government of Peru last month to operate and develop the country’s biggest oil block.
The company had earlier announced the termination of takeover offer from Mexican industrial conglomerate Alfa SAB de CV and energy investment firm Harbour Energy Ltd in July.
Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Shounak Dasgupta