Battalion Oil amendment edits covenants of credit agreement

By Wendy Van Sickle

Columbus, Ohio, Nov. 2 – Battalion Oil Corp. amended its senior secured revolving credit agreement on Oct. 29 with Bank of Montreal as administrative agent, setting the borrowing base at $190 million and suspending testing of the current ratio financial covenant until the fiscal quarter ending Dec. 31, 2021, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also amends some other covenants including covenants relating to increasing the minimum mortgaged total value of proved borrowing base properties to 90% from 85%.

Additionally, the amendment provides for new covenants that, among other things, require the company to enter into required swap agreements representing not less than 65% of the company’s reasonably anticipated projected production from its proved reserves classified as developed producing reserves through at least Dec. 31, 2022 and prohibit no more than $3 million of the company’s uncontested accounts payable or accrued expenses, liabilities or other obligations from remaining outstanding for longer than 90 days.

Also, the administrative agent and the lenders consented to a waiver of the current ratio covenant for the fiscal quarter ended Sept. 30.

Battalion, formerly Halcon Resources Corp., is a Houston-based independent energy company.

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