|12 Months Ended|
Dec. 31, 2016
|Debt Disclosure [Abstract]|
The following table summarizes our long-term debt as of the dates presented:
1 Issuance costs attributable to the Senior Notes were subject to an accelerated write-off in advance of our bankruptcy filing during the three months ended June 30, 2016.
2 Issuance costs attributable to the Credit Facility, which represent costs attributable to the access to credit over the Credit Facility’s contractual term, have been presented as a component of Other assets (see Note 14).
3 Issuance costs attributable to the RBL were presented as a component of Other assets (see Note 14) prior to the accelerated write-off in advance of our bankruptcy filing during the three months ended June 30, 2016.
On the Effective Date, we entered into the Credit Facility. The Credit Facility provides for a $200 million revolving commitment and has an initial borrowing base of $128 million. The Credit Facility also includes a $5.0 million sublimit for the issuance of letters of credit, of which $0.8 million were outstanding as of December 31, 2016. The Credit Facility is governed by a borrowing base calculation, which is redetermined semi-annually, and the availability under the Credit Facility may not exceed the lesser of the aggregate commitments and the borrowing base. The Credit Facility is scheduled for its initial redetermination in April 2017. After April 1, 2017, the Credit Facility lenders may, at their discretion, initiate a redetermination at any time during the six-month period between scheduled redeterminations. The Credit Facility is available to us to pay expenses associated with our bankruptcy proceedings and for general corporate purposes including working capital. The Credit Facility matures in September 2020.
The outstanding borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) a customary reference rate plus an applicable margin ranging from 2.00% to 3.00%, determined based on the average availability under the Credit Facility or (b) a customary London interbank offered rate (“LIBOR”) plus an applicable margin ranging from 3.00% to 4.00%, determined based on the average availability under the Credit Facility. Interest on reference rate borrowings is payable quarterly in arrears and is computed on the basis of a year of 365/366 days, and interest on eurocurrency borrowings is payable every one, three or six months, at the election of the borrower, and is computed on the basis of a year of 360 days. As of December 31, 2016, the actual interest rate on the outstanding borrowings under the Credit Facility was 3.67%. Unused commitment fees are charged at a rate of 0.50%.
The Credit Facility is guaranteed by us and all of our subsidiaries (the “Guarantor Subsidiaries”). The guarantees under the Credit Facility are full and unconditional and joint and several. Substantially all of our consolidated assets are held by the Guarantor Subsidiaries. The parent company has no material independent assets or operations. There are no significant restrictions on the ability of the parent company or any of the Guarantor Subsidiaries to obtain funds through dividends, advances or loans. The obligations under the Credit Facility are secured by a first priority lien on substantially all of our assets.
The Credit Facility requires us to maintain (1) a minimum interest coverage ratio (adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses as defined in the Credit Facility (“EBITDAX”) to adjusted interest expense), measured as of the last day of each fiscal quarter, of 3.00 to 1.00, (2) a minimum current ratio (as defined in the Credit Facility, which considers the unused portion of the total commitment as a current asset), measured as of the last day of each fiscal quarter of 1.00 to 1.00, and (3) a maximum leverage ratio (consolidated indebtedness to adjusted EBITDAX), measured as of the last day of each fiscal quarter, initially of 4.00 to 1.00, decreasing on December 31, 2017 to 3.75 to 1.00 and on March 31, 2018 and thereafter to 3.50 to 1.00.
The Credit Facility also contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports and budgets, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens and indebtedness, merger, consolidation or sale of assets, payment of dividends, and transactions with affiliates and other customary covenants.
As of December 31, 2016, and through the date upon which the Consolidated Financial Statements were issued, we were in compliance with all of these covenants.
Pre-Petition Credit Facility
As described in Notes 4 and 5, our principal and interest obligations outstanding under the RBL as well as certain associated fees and expenses were satisfied in cash in full on the Effective Date. These obligations were funded from a combination of cash on hand, proceeds from the Rights Offering and proceeds from initial borrowings under the Credit Facility.
2019 Senior Notes and 2020 Senior Notes
The Senior Notes were included in “Liabilities subject to compromise” on the Consolidated Balance Sheet of the Predecessor as of September 12, 2016 (see Note 5) and were included in “Current liabilities” as of December 31, 2015. As described in Notes 4 and 5, the Senior Notes were canceled upon our emergence from bankruptcy.
The entire disclosure for long-term debt.
Reference 1: http://www.xbrl.org/2003/role/presentationRef