Magnum Hunter increases borrowing base on revolver to $170 million

By Susanna Moon

Chicago, July 13 - Magnum Hunter Resources Corp. said it raised the borrowing base under its $250 million senior secured revolving credit facility by $25 million to $170 million. Bank of Montreal is the administrative agent.

Interest on the facility will be Libor plus 250 basis points to 350 bps, depending on the amount drawn. Other amendments to the facility include no Libor floor.

The 17% increase in Magnum Hunter's borrowing base is due to organic growth of the company's proved reserve base, which includes the growth in reserves from the two recently closed corporate acquisitions of NGAS and NuLoch, according to the company's press release.

The borrowing base is reset semiannually based on the company's total proved crude oil and natural gas reserves, the release noted.

Magnum said that it expects another bump up in its borrowing base under the facility after its third-party engineering reserve report as of June 30, which will incorporate reserve additions in the second quarter.

The company said it had $139 million of outstanding debt under its bank credit facility as of June 30, which provides for about $32 million of liquidity based on the new borrowing base amount.

Capital One, NA is the syndication agent, and Amegy Bank NA, KeyBank NA and UBS Securities LLC are the documentation agents. BMO Capital Markets is the lead arranger and bookrunner. Lending banks also include Citibank, NA, Credit Suisse AG, Deutsche Bank Trust Co. Americas and Union Bank, NA.

Magnum Hunter is an independent oil and gas company based in Houston.

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