Continental Resources amends facility, lifting size to $1.5 billion

By Jennifer Chiou

New York, Aug. 1 - Continental Resources, Inc. entered into on July 26 an amendment to its credit agreement dated June 30, 2010 to, among other things, increase the commitment amount to $1.5 billion from $1.25 billion, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also increased the borrowing base to $2.75 billion from $2.25 billion.

Banner Pipeline Company LLC is the guarantor, and Union Bank, NA acted as administrative agent and issuing lender.

The company also changed the leverage ratio to 4 to 1 from 3.75 to 1.

Borrowings will bear interest based on usage. Specifically, the interest rate will be Libor plus 150 basis points for usage of less than 25%, Libor plus 175 bps for usage greater than 25% but less than 50%, Libor plus 200 bps for usage greater than 50% but less than 75%, Libor plus 225 bps for usage greater than 75% and less than 90% and Libor plus 250 bps for usage above 90%.

The commitment fee ranges from 37.5 bps to 50 bps, while the letter-of-credit fee stands at 150 bps to 250 bps, both also dependent on usage.

Among the other changes, approval of the semiannual redetermination of the borrowing base requires the consent of lenders holding more than 50% of the outstanding commitments, compared to 75% in the previous facility, except in the case of borrowing base increases, and the other permitted debt threshold is now $100 million, up from $50 million.

Continental Resources is an Oklahoma City-based independent oil and natural gas exploration and production company.

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