SandRidge Energy amends, restates $600 million reserve-based revolver

By Sarah Lizee

Olympia, Wash., June 27 – SandRidge Energy, Inc. amended and restated its existing $600 million reserve-based revolving credit facility on June 21 with Royal Bank of Canada as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The maturity was extended to April 1, 2021 from March 31, 2020.

The commitments include some continuing lenders as well as new lenders.

The amendment also established a facility limit equal to the least of the borrowing base, which was $300 million at closing, the aggregate elected commitment amount of the lenders, which was $270 million at close, and the aggregate $600 million of commitments from the lenders.

Pricing was reduced to Libor plus 200 basis points to 300 bps, depending on elected commitment use. It was previously Libor plus 300 bps to 400 bps, and the margin depended on borrowing base use.

The commitment fee is 50 bps.

Also, the amendment reduced the proportion of the company’s proved reserves required to be subject to first-priority mortgages to 85% of the PV-9 valuation of all proved reserves included in the most recently delivered reserve report of the company from 95%.

The amendment additionally provides for the issuance of up to $10 million of swingline loans.

The next borrowing base redetermination is scheduled for Oct. 1, followed by scheduled semiannual borrowing base redeterminations after that.

The restated credit facility requires the company to, commencing with the first full quarter ending after the restatement date, maintain a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.5 to 1.0, and a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00.

In connection with the restated credit facility, the company replaced the existing credit agreement. The company did not pay any prepayment penalties.

SandRidge is an oil and natural gas company based in Oklahoma City.

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