LRR to pay down revolver with new $50 million second-lien term loan

By Angela McDaniels

Tacoma, Wash., June 28 - LRR Energy, LP will repay some of the borrowings under its $500 million senior secured revolving credit facility with the proceeds of a new $50 million senior secured second-lien term loan facility, according to a company news release.

LRE Operating, LLC is the borrower under the new term loan. LRR Energy is guarantor. Wells Fargo Energy Capital, Inc. is the lender.

The repayment will leave $172.8 million of outstanding borrowings under the revolver. The borrowing base under the revolver will remain $240.0 million, and the undrawn availability will be $67.2 million.

The term loan matures on Jan. 20, 2017 and has an initial borrowing rate of Libor plus 550 basis points through March 31, 2013. The borrowing rate increases to Libor plus 700 bps from April 1, 2013 through Dec. 31, 2013 and will remain at Libor plus 850 bps from Jan. 1, 2014 until maturity.

The term loan has financial covenants requiring LRR Energy to not exceed a maximum total debt to EBITDAX ratio and to maintain a minimum current ratio and minimum proved reserve PV-10 to total debt ratio.

LRR Energy is a Houston-based limited partnership formed by affiliates of Lime Rock Resources to operate, acquire, exploit and develop producing oil and natural gas properties in North America.

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