Coldren Resources targets Monday launch for $590 million facility

By Sara Rosenberg

New York, May 30 - Coldren Resources LP will most likely hold a bank meeting on Monday to launch its proposed $590 million credit facility, according to a market source.

Previously it was known that the deal would be launching next week, but a specific target date had been unavailable.

Credit Suisse and Bank of America are the lead banks on the deal.

The facility consists of a $375 million first-lien term loan talked at Libor plus 350 basis points, a $65 million synthetic facility for hedging and letters-of-credit talked at Libor plus 350 bps and a $150 million second-lien term loan talked at Libor plus 550 bps.

Proceeds will be used to help finance the acquisition of certain Gulf of Mexico shelf assets from Noble Energy Inc. for $625 million.

The acquisition is expected to close by June 30, with an effective date of March 1, subject to regulatory review and customary closing adjustments and conditions.

Coldren is a subsidiary of Coldren Oil & Gas Co. LP, a First Reserve portfolio company. Superior Energy Inc. has acquired a 40% interest in Coldren.

Superior's investment in Coldren will include 10% of the funds required to both purchase Noble Energy's shelf assets, expected to be up to $40 million, and pay for Superior's portion of insurance, hedging, fees and expenses, expected to be up to $30 million.

First Reserve's investment in Coldren will include 15% of the funds required to both purchase Noble Energy's shelf assets, expected to be up to $60 million, and pay for First Reserve's portion of insurance, hedging, fees and expenses, expected to be up to $45 million.

Coldren is a New Orleans-based company that pursues low-risk drill-to-earn opportunities on the Gulf of Mexico shelf.

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