Quarterly report pursuant to Section 13 or 15(d)

Borrowings

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Borrowings
9 Months Ended
Sep. 30, 2015
Borrowings [Abstract]  
Borrowings

Note 5 - Borrowings 

 

The Company’s borrowings consisted of the following at:

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

December 31, 2014

Principal components:

 

 

 

 

 

 

Senior secured revolving credit facility

 

$

99,000 

 

$

35,000 

Secured second lien term loan

 

 

300,000 

 

 

300,000 

  Total carrying value of borrowings

 

$

399,000 

 

$

335,000 

 

Senior secured revolving credit facility (the “Credit Facility”)

 

On March 11, 2014, the Company entered into the Fifth Amended and Restated Credit Agreement to the Credit Facility with a maturity date of March 11, 2019.  JPMorgan Chase Bank, N.A. is Administrative Agent, and participating lenders include Regions Bank, Citibank, N.A., Capital One, N.A., KeyBank, N.A., Whitney Bank, IberiaBank, N.A., OneWest Bank, N.A., SunTrust Bank and Royal Bank of Canada. The total notional amount available under the Credit Facility is $500,000. Amounts borrowed under the Credit Facility may not exceed the borrowing base, which is generally reviewed on a semi-annual basis. As of September 30, 2015, the Credit Facility’s borrowing base was $250,000. The Credit Facility is secured by first preferred mortgages covering the Company’s major producing properties. Subsequent to September 30, 2015 the Credit Facility’s borrowing base was increased to $300,000 following the lenders’ regularly scheduled semi-annual redetermination process.

 

As of September 30, 2015, the balance outstanding on the Credit Facility was $99,000 with a weighted-average interest rate of 2.21%, calculated as the LIBOR plus a tiered rate ranging from 1.75% to 2.75%, which is determined based on utilization of the facility. In addition, the Credit Facility carries a commitment fee of 0.5% per annum, payable quarterly, on the unused portion of the borrowing base.

 

Secured second lien term loan (the “Term Loan”)

 

On October 8, 2014, the Company entered into the Term Loan with an aggregate amount of up to $300,000 and a maturity date of October 8, 2021. The Royal Bank of Canada is Administrative Agent, and participants include several institutional lenders. The Term Loan may be prepaid at the Company’s option, subject to a prepayment premium. The prepayment amount (i) is 102% if the prepayment event occurs prior to October 8, 2016, (ii) is 101% if the prepayment event occurs on or after October 8, 2016 but before October 8, 2017, and (iii) is 100% for prepayments made on or after October 8, 2017. The Term Loan is secured by junior liens on properties mortgaged under the Credit Facility, subject to an intercreditor agreement.

 

As of September 30, 2015, the balance outstanding on the Term Loan was $300,000 with an interest rate of 8.5%, calculated at a rate of LIBOR (subject to a floor rate of 1.0%) plus 7.5% per annum. The Company can elect a LIBOR rate based on various tenors, and is currently incurring interest based on an underlying three-month LIBOR rate, which was last elected in October 2015.

 

Restrictive covenants

 

The Company’s Credit Facility and Term Loan contain various covenants including restrictions on additional indebtedness, payment of cash dividends and maintenance of certain financial ratios. The Company was in compliance with these covenants at September 30, 2015.