Quest Cherokee gets $45 million second-lien loan, expands revolver borrowing base

By Sara Rosenberg

New York, July 16 - Quest Cherokee LLC closed on a new $45 million six-month second-lien term loan and expanded its revolving credit facility borrowing base to $190 million from $160 million, according to an 8-K filed with the Securities and Exchange Commission Wednesday.

Royal Bank of Canada is the administrative agent on the term loan, KeyBank is the syndication agent and Société Générale is the documentation agent.

Pricing on the term loan is Libor plus 650 basis points from July 11 through Oct. 11, and Libor plus 700 bps thereafter.

Under the term loan agreement, the company is required by Oct. 13 to complete a private placement of equity securities or debt, engage one or more investment banks to publicly sell or privately place common equity securities or debt, or engage RBC Capital Markets to arrange a new financing in an amount sufficient to repay the term loan in full on or before Jan. 11.

The term loan and the borrowing base expansion were completed on July 11.

Proceeds were used to fund the acquisition of Quest Eastern Resource LLC's wellbores and related assets associated with proved developed producing and proved developed non-producing reserves located in West Virginia and New York for about $71.6 million, subject to post-closing adjustment.

Quest Cherokee is an Oklahoma City-based provider of oil and natural gas drilling services.

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