Abraxas obtains $50 million credit facility

New York, Dec. 10 - Abraxas Petroleum Corp. said it obtained a commitment for a new senior credit facility.

Interest on the three-year loan will be Wells Fargo Bank, NA's prime rate plus 450 basis points. Some of the interest may be capitalized. The rate has a floor of 9%.

Availability is subject to a borrowing base set according to Abraxas' crude oil and natural gas reserves. The San Antonio, Texas oil and gas exploration and production company said it estimates the initial base will be $45.5 million, assuming the credit facility closes by Jan. 8, 2003 and the company completes its note exchange offer. Of the availability, Abraxas will be able to sue $40.5 million to fund its restructuring transactions.

The facility will be secured by a first lien on all the assets of the company and the guarantors on the facility, including all crude oil and natural gas properties and natural gas processing plants.

Abraxas will be subject to various covenants including minimum levels of consolidated EBITDA, minimum ratios of consolidated EBITDA to cash interest expense and a limitation on annual capital expenditures. It will also be required to use any cash or equivalents of more than $2.0 million at the end of each quarter to pay down borrowings.

The new facility is subject to completion of the exchange offer. Abraxas said it also has a commitment from the same lender for a $68 million facility due May 2004 if it does not complete the exchange.

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