Abraxas Petroleum redetermines facility borrowing base at $130 million

By Tali Rackner

Norfolk, Va., April 21 – Abraxas Petroleum Corp. amended its third amended and restated senior secured credit facility on April 20 with Societe Generale as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment provides for a borrowing base of $130 million, effective April 1. The borrowing base will be automatically reduced to $120 million on Oct. 1 unless it has been redetermined to an amount less than $120 million prior to Oct. 1 or unless the redetermination scheduled to occur with the delivery of our internal engineering report on or about Aug. 31 has become effective before Oct. 1.

The borrowing base can never exceed the $300 million maximum commitment amount, the filing said.

Interest is Libor plus 75 basis points to 175 bps, based on usage. At closing, the interest rate was about 2.93%.

The amendment also sets forth certain additional covenants, including:

• 100% of the net proceeds from any sale of any properties occurring between April 1 and Oct. 1 must be used to repay amounts outstanding under the credit facility;

• If the sum of cash on hand plus liquid investments exceeds $10 million, then the amount in excess of $10 million must be used to pay amounts outstanding under the credit facility;

• Abraxas must grant the lenders a security interest in at least 90% of the PV-10 of its proven reserves; and

• Abraxas must grant the lenders a security interest in the company’s headquarters building and two ranches it owns, none of which have previously secured its obligations under the credit facility.

Abraxas is a San Antonio-based crude oil and natural gas exploration and production company.

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