Endeavour to draw funds under revolver for cash collateralization

By Jennifer Chiou

New York, April 18 - Endeavour International Corp. and its wholly owned subsidiary, Endeavour Energy UK Ltd., entered into on April 12 a revolving credit facility with Cyan Partners, LP as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The filing noted that in anticipation of the company's pending acquisition of certain oil interests in the North Sea and the associated repayment of its existing senior term loan with Cyan and other lenders, Endeavour has opted to pursue a $100 million senior credit facility.

In addition, Endeavour has a letter-of-credit facility with Commonwealth Bank of Australia, which exercised its right to require the company to cash collateralize an issued letter of credit.

The company said that it will use roughly $32 million of the funds available under the revolving credit facility to replace the funds used in connection with this cash collateralization.

Borrowings under the revolver will be limited to an aggregate of $40 million at any time and will accrue interest at a rate of 12% per year, plus an additional 3% in annual interest in kind through an increase in the principal amount of borrowings, the filing stated.

The $40 million will be secured by a second lien until the escrow release date. From and after that release date, borrowings will accrue interest at a rate of 13% per year and will be limited to an aggregate of $100 million at any time, the filing said. This amount may be increased up to $150 million with the consent of the lenders representing a majority of the borrowings then outstanding under the revolver.

Until the net proceeds from the company's February offering of notes due 2018 are released from escrow, the credit agreement will contain covenants similar to those contained in the credit agreement governing the senior term loan.

The revolver will come due on Oct. 12, 2013. If the acquisition is not completed on or before June 15, however, then any outstanding borrowings will become immediately due.

Endeavour International is a Houston-based oil and gas exploration and production company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.