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Gastar Exploration amends revolver to allow dividend, plans paydown
By Angela McDaniels
Tacoma, Wash., Jan. 10 – Gastar Exploration Inc. amended its revolving credit facility in connection with the declaration of special cash dividends on its preferred stock, according to a company news release.
Gastar amended the revolver to, among other things, permit the limited payment of certain cash dividends on its preferred stock, including the special dividends, provided that the borrowing base is correspondingly reduced and Gastar pays down its outstanding debt in the amount of dividends paid.
The company will pay $12.1 million of dividends on its preferred stock on Jan. 31.
Under the amendment, payment of the January dividend and monthly preferred stock cash dividends through May is permitted contingent on the absence of any defaults or borrowing base deficiency, having cash liquidity (including any available revolver borrowings) of more than $30 million and paying permitted dividends solely from proceeds received by Gastar from sales of equity since Nov. 30, including through the company’s at-the-market sales program.
Gastar said there is no assurance, however, when or if it will declare and pay further preferred stock dividends after Jan. 31.
Gastar’s credit agreement had previously prohibited payment of cash dividends on preferred stock after March 31, 2016.
Under the credit agreement amendment, Gastar also agreed to pay down debt under its revolver by at least an additional $8.1 million by April 30, which is anticipated to be paid out of proceeds received from its sale of non-core Canadian County, Oklahoma, oil and gas properties.
Gastar Exploration is an energy company based in Houston.
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