Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.20.1
Subsequent Events
 3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Hedging
Subsequent to March 31, 2020, the Company entered into the following derivative contracts:
For the Remainder For the Full Year
Oil contracts (WTI) of 2020 of 2021
   Swap contracts
   Total volume (Bbls) 915,000    —   
   Weighted average price per Bbl $29.77    $—   
Oil contracts (WTI Calendar Month Average Roll)
   Swap contracts
   Total volume (Bbls) 5,697,500    —   
   Weighted average price per Bbl ($2.66)   $—   
Oil contracts (Brent ICE differential)          
   Swap contracts
   Total volume (Bbls) 396,800    —   
   Weighted average price per Bbl ($4.00)   $—   
Natural gas contracts (Henry Hub)
   Collar contracts
      Total volume (MMBtu) 1,525,000    7,750,000   
      Weighted average price per MMBtu
         Ceiling (short call) $3.25    $2.93   
         Floor (long put) $2.67    $2.55   
   Swap contracts
      Total volume (MMBtu) —    8,675,000   
      Weighted average price per MMBtu $—    $2.70   
First Amendment to the Credit Agreement
On May 7, 2020, the Company entered into the first amendment to its credit agreement governing the revolving credit facility. The amendment, among other things, (a) establishes a new borrowing base as a result of the spring 2020 scheduled redetermination in the amount of $1.7 billion and reduces the elected commitments to $1.7 billion; (b) permits the incurrence of, among other things, new second lien notes in an aggregate principal amount of up to $400 million (the “Second Lien Notes”) so long as any such Second Lien Notes are subject to an intercreditor agreement providing that the liens securing the Second Lien Notes rank junior to the liens securing the credit agreement; (c) provides that testing of the ratio of consolidated total debt to Adjusted EBITDAX on a quarterly basis is suspended until March 31, 2022, as of which testing date and the last day of each fiscal quarter ending thereafter, such ratio may not exceed 4.00 to 1.00; (d) provides a new financial covenant testing the ratio of the consolidated total secured debt to Adjusted EBITDAX and provides that such ratio on a quarterly basis as of the last day of each quarter beginning with March 31, 2020 up to and including the quarter ending December 31, 2021 may not exceed 3.00 to 1.00; (e) provides that the testing of the ratio of current assets to current liabilities is suspended until September 30, 2020, as of which testing date and the last day of each fiscal quarter ending thereafter, such ratio may not be less than 1.00 to 1.00; (f) increases the applicable margins for borrowings under the credit agreement for both LIBOR loans and base rate loans by 75 basis points across all commitment utilization ranges; (g) introduces customary anti-cash hoarding protections tested weekly, which restrict the Company’s ability to maintain unrestricted cash on its balance sheet in amounts in the excess of the lesser of (i) $125.0 million or (ii) 7.5% of the then current borrowing base; (h) requires the Company to enter into and maintain minimum hedges for the 12 month period starting January 1, 2021 through December 31, 2021, for which the net notional volumes on a barrel of oil equivalent basis are not less than 40% of the reasonably anticipated production from the Company’s oil and gas properties which are classified as proved developed producing reserves as of April 1, 2020; (i) requires mortgage and title coverage on at least 90% of the total value of proved oil and gas properties evaluated in the most recently delivered reserve report; and (j) restricts the Company’s ability to make certain investments and cash distributions by lowering the maximum leverage ratio required to make such distributions to 2.50 to 1.00.