Chaparral Energy gets loan amendment OK, borrowing base affirmed

By Sara Rosenberg

New York, May 15 - Chaparral Energy Inc. received lender approval to amend its credit facility and affirm the borrowing base at $600 million, according to a 10-Q filed with the Securities and Exchange Commission on Friday.

Under the amendment, pricing on the facility will increase to a range of Libor plus 250 basis points to 425 bps based on use from a range of Libor plus 200 bps to 375 bps.

In addition, capital expenditures for April 1 to Dec. 31 will be limited to discretionary cash flows.

The amendment will also adjust the consolidated senior total debt to consolidated EBITDAX covenant to subtract cash from the calculation of consolidated senior total debt, and to reset the covenant levels to 3.00 times for periods ending June 30 through March 31, 2010, 2.75 times for the periods ending June 30, 2010 through Dec. 31, 2010, and 2.50 times for periods ending March 31, 2011 and thereafter.

Furthermore, monetization of select 2012 and 2013 oil derivatives currently used in determining the borrowing base will be approved, with the borrowing base being reduced dollar for dollar by 85% of the net realized proceeds received from the monetization of such derivatives.

And, proceeds from non-borrowing base asset sales, incremental equity sales, and/or excess proceeds from derivative monetizations will be able to be used to buy back existing bonds, subject to certain limitations, including the requirement to maintain $75 million of available cash liquidity after the bond repurchase.

The amendment is subject to final documentation.

Lenders will get a 37.5 bps amendment fee.

Originally, the company had requested an extension of the credit facility's maturity date to Jan. 31, 2012 from October 31, 2010. It, however, would not have obtained the 100% lender approval needed for this request, so it was eliminated from the amendment proposal.

Chaparral is an Oklahoma City-based oil and natural gas production and exploitation company.

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