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Sabine must repay $250 million deficiency tied to borrowing base cut
By Caroline Salls
Pittsburgh, May 1 – Sabine Oil & Gas Corp. announced Friday that the borrowing base under its revolving credit facility has been decreased to $750 million from $1 billion, resulting in a deficiency of about $250 million.
According to a company news release, the borrowing base was decreased as part of Sabine’s regularly scheduled semiannual redetermination by its lenders.
The deficiency must be repaid in six monthly installments of $41.54 million, with the first payment due at the end of May.
The new $750 million borrowing base will be in effect until the company’s next borrowing base redetermination for the credit facility, according to an 8-K filed with the Securities and Exchange Commission.
Sabine said it also continues to work with the revolver lenders to address an existing default before the grace period expires on May 8.
As previously reported, Sabine has retained financial adviser Lazard and legal adviser Kirkland & Ellis LLP to advise management and the board of directors on strategic alternatives related to its capital structure.
As of April 20, the company had a cash balance of roughly $280 million, which Sabine said provides substantial liquidity to fund its current operations. The company is continuing to pay suppliers and other trade creditors in the ordinary course.
In addition, Sabine said in the 8-K that it received notice on Thursday that Wilmington Savings Fund Society, FSB has been appointed as successor trustee under the indenture governing the 7˝% senior notes due 2020 originally issued by Forest Oil Corp.
Formerly Forest Oil Corp., Sabine is an oil and gas company based in Houston.
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