Jonah Energy recapitalization includes 7¼% note tender, redemption and restated ABL facility

By Wendy Van Sickle

Columbus, Ohio, Jan. 6 – Jonah Energy LLC closed on Dec. 29 financial transactions that reduce its debt by about $580 million. These transactions included a tender for all $496 million of Jonah’s 7¼% senior notes due 2025 and entry into an amended and restated reserve-based revolving credit facility with an initial borrowing base of $750 million, according to a news release.

Any of the notes not tendered under the offer were redeemed, the company said.

The new revolver matures in mid-2024.

The company also raised $85 million through an equity offering available to holders of the notes and used proceeds to reduce the outstanding debt under its prior revolver.

Jonah Energy has $80 million of available liquidity as of Dec. 31.

After giving effect to the transactions, Jonah Energy is majority-owned by some former holders of the notes. The company is operating one rig and said it “expects to generate significant free cash flow into 2021 and beyond.”

The San Antonio-based oil and gas producer plans to use the proceeds to repay bank debt.

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