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Debt and Debt Issuance Costs
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt and Debt Issuance Costs Debt and Debt Issuance Costs
The Company’s debt at December 31, 2021 and 2020, was as follows:
As at December 31,
(Thousands of U.S. Dollars)20212020
Current
Revolving credit facility$67,500 $— 
Unamortized debt issuance costs(513)— 
Current portion of long-term debt$66,987 $— 
Long Term
6.25% Senior Notes
$300,000 $300,000 
7.75% Senior Notes
300,000 300,000 
Revolving credit facility— 190,000 
Unamortized debt issuance costs(14,030)(18,124)
Long-term lease obligation (1)
1,434 2,894 
Long-term debt$587,404 $774,770 
Total Debt$654,391 $774,770 

(1) The current portion of the lease obligation has been included in accounts payable and accrued liabilities on the Company’s balance sheet and totaled $3.3 million as at December 31, 2021 (December 31, 2020 - $3.3 million).

Senior Notes

At December 31, 2021, the Company had $300.0 million of 7.75% Senior Notes due 2027 (the “7.75% Senior Notes”) and $300.0 million of 6.25% Senior Notes due 2025 (the “6.25% Senior Notes” and, together with the 7.75% Senior Notes, the “Senior Notes”). The Senior Notes are fully and unconditionally guaranteed by the Company and certain subsidiaries of the Company that guarantee the revolving credit facility.

The 7.75% Senior Notes bear interest at a rate of 7.75% per year, payable semi-annually in arrears on May 23 and November 23 of each year, beginning on November 23, 2019. The 7.75% Senior Notes will mature on May 23, 2027, unless earlier redeemed or repurchased.

Before May 23, 2023, the Company may, at its option, redeem all or a portion of the 7.75% Senior Notes at 100% of the principal amount plus accrued and unpaid interest and a “make-whole” premium. Thereafter, the Company may redeem all or a portion of the 7.75% Senior Notes plus accrued and unpaid interest applicable to the date of the redemption at the following redemption prices: 2023 - 103.875%; 2024 - 101.938%; 2025 and thereafter - 100%.

The 6.25% Senior Notes bear interest at a rate of 6.25% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2018. The 6.25% Senior Notes will mature on February 15, 2025, unless earlier redeemed or repurchased.

Before February 15, 2022, the Company may, at its option, redeem all or a portion of the 6.25% Senior Notes at 100% of the principal amount plus accrued and unpaid interest and a make-whole premium. Thereafter, the Company may redeem all or a portion of the 6.25% Senior Notes plus accrued and unpaid interest applicable to the date of the redemption at the following redemption prices: 2022 - 103.125%; 2023 - 101.563%; 2024 and thereafter - 100%.

Credit Facility

At December 31, 2021, the Company had a revolving credit facility with a syndicate of lenders with a borrowing base of $150.0 million. On December 21, 2021, management completed the semi-annual re-determination and elected to reduce the borrowing base from $215.0 million to $150.0 million, with $125.0 million readily available and $25.0 million subject to approval by
majority lenders. The maturity date of the borrowings under the revolving credit facility is November 10, 2022. The next re-determination of the borrowing base is due to occur no later than May 2022.

Under the terms of credit facility, the Company is required to maintain compliance with the following financial covenants: limitations on Company’s ratio of Debt to Earnings before interest, taxes, depletion, depreciation and accretion and exploration expenses (“EBITDAX”) to a maximum of 4.0; limitations on Company’s ratio of Senior Secured Debt to EBITDAX to a maximum of 3.0; and the maintenance of a ratio of EBITDAX to interest expense of at least 2.5. The failure to comply with these financial covenants would cause a default under the terms of the credit agreement, resulting in an acceleration of repayment of all indebtedness under the revolving credit facility. As at December 31, 2021, the Company was in compliance with all covenants.

Amounts drawn down under the revolving credit facility bear interest, at the Company’s option, at the USD LIBOR rate plus a margin ranging from 2.90% to 4.90% (December 31, 2020 - 2.90% to 4.90%), or an alternate base rate plus a margin ranging from 1.90% to 3.90% (December 31, 2020 - 1.90% to 3.90%), in each case based on the borrowing base utilization percentage. The alternate base rate is currently the U.S. prime rate. Undrawn amounts under the revolving credit facility bear interest from 0.73% to 1.23% (December 31, 2020 - 0.73% to 1.23%) per annum, based on the average daily amount of unused commitments.

The Company’s revolving credit facility is guaranteed by and secured against the assets of certain of the Company’s subsidiaries (the “Credit Facility Group”). Under the terms of the credit facility, the Company is subject to certain restrictions on its ability to distribute funds to entities outside of the Credit Facility Group, including restrictions on the ability to pay dividends to shareholders of the Company.

Certain LIBOR benchmarks will no longer be published after December 31, 2021. We expect the LIBOR benchmark to be replaced with risk-free rates. The Company does not expect this change to have a material impact on the Company as U.S dollar borrowings under the credit facilities can also bear interest at the U.S. base loan rate.

Interest Expense

The following table presents the total interest expense recognized in the accompanying consolidated statements of operations:
Year Ended December 31,
(Thousands of U.S. Dollars)202120202019
Contractual interest and other financing expenses$50,572 $50,515 $39,892 
Amortization of debt issuance costs3,809 3,625 3,376 
$54,381 $54,140 $43,268 
The Company incurred debt issuance costs in connection with the issuance of the Senior Notes and its revolving credit facility. As at December 31, 2021, the balance of unamortized debt issuance costs has been presented as a direct deduction against the carrying amount of debt and is being amortized to interest expense using the effective interest method over the term of the debt.