The continued development of the Company's oil and gas assets is dependent on the ability of the Company to secure sufficient funds through operations, bank facilities and other sources from the strategic alternative process. Short-term capital is required to finance accounts receivable and other similar short-term assets while the acquisition and development of oil and natural gas properties requires larger amounts of long-term capital.
At March 31, 2013, the Company had total credit facilities of $65 million, consisting of a $55 million revolving term credit facility and a $10 million working capital credit facility with a syndicate of Canadian banks. Advances can be drawn in either Canadian or U.S. funds and bear interest at the bank's prime lending rate, bankers' acceptance or LIBOR loan rates plus applicable margins. These margins vary from 3% to 4% depending on the borrowing option used. At March 31, 2013, no amounts were drawn in U.S. funds. The Company had $9.5 million of credit available at March 31, 2013. Anderson will prudently use its bank loan facilities to finance its operations as required.
Due to spring break-up, Anderson anticipates very little capital spending in the second quarter of the year. As such, bank debt plus working capital deficiency is expected to be lower at the end of second quarter of 2013 than at the end of the first quarter of 2013. The Company will revisit its 2013 capital program in the second half of the year depending on the outcome of the strategic alternatives process.
The available lending limits under the bank facilities are reviewed twice a year and are based on the bank syndicate's interpretation of the Company's reserves and future commodity prices. The last review was conducted on December 15, 2012. The revolving term credit facility and the working capital credit facility have a maturity date of July 10, 2013 and, if the facility were not renewed, all outstanding advances would become repayable on July 10, 2013. There can be no assurance that the amount of the available bank lines will not be adjusted at the next scheduled review to be completed prior to May 31, 2013.
OFF BALANCE SHEET ARRANGEMENTS
The Company had no guarantees or off-balance sheet arrangements other than as described in the management's discussion and analysis for the year ended December 31, 2012 under "Contractual Obligations".
CHANGES TO CONTRACTUAL OBLIGATIONS
The Company enters into various contractual obligations in the course of conducting its operations. There were no material changes to the contractual obligations that were discussed in management's discussion and analysis for the year ended December 31, 2012 other than the following:
-- Cardium Horizontal Well Program (Oil) - At December 31, 2012 the Company had an obligation to drill one Cardium horizontal oil well. The commitment was fulfilled in the first quarter of 2013. The Company has no other drilling commitments as at March 31, 2013.
CHANGES IN ACCOUNTING POLICIES
On January 1, 2013, the Company adopted new standards with respect to consolidations (IFRS 10), joint arrangements (IFRS 11), disclosure of interests in other entities (IFRS 12), fair value measurements (IFRS 13) and amendments to financial instruments disclosures (IFRS 7). The adoption of these standards had no impact on the amounts recorded in the consolidated financial statements as at January 1, 2013 or on the comparative periods, but did result in additional disclosures with regards to IFRS 13 and IFRS 7. Refer to the unaudited condensed interim consolidated financial statements for the three month period ended March 31, 2013.