Stone Energy announces $175.3 million borrowing base deficiency

By Tali Rackner

Norfolk, Va., April 14 – Stone Energy Corp. said it had a borrowing base deficiency of $175.3 million as of Wednesday as a result of outstanding borrowings of $457 million and letters of credit of $18.3 million under its bank credit agreement, according to a press Thursday release.

Stone had cash on hand of about $360 million as of Thursday.

The credit agreement provides that within 30 days after the agent delivers written notice to Stone of a borrowing base deficiency, Stone must elect to do one or more of the following: (a) Repay the loan to eliminate the deficiency within 10 days; (b) add additional collateral to eliminate the deficiency within 30 days; or (c) pay the deficiency in six equal monthly installments to eliminate the deficiency within six months.

The borrowing base was decreased to $300 million from $500 million.

Stone Energy is a Lafayette, La. oil and gas exploration and production company.

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