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Midstates amends revolver to increase borrowing base to $425 million
By Angela McDaniels
Tacoma, Wash., May 22 - Midstates Petroleum Co., Inc. subsidiary Midstates Petroleum Co. LLC amended its $500 million senior revolving credit facility on Monday in anticipation of an upcoming acquisition, according to an 8-K filing with the Securities and Exchange Commission.
The amendment specifies that once the acquisition is complete, the revolver will automatically be amended to accommodate the issuance of up to $700 million of unsecured debt without a corresponding reduction in borrowing base and to increase the borrowing base to $425 million, subject to reduction if the amount of assets acquired is less than expected.
As of March 31, the borrowing base was $285 million.
The company agreed to pay a fee of 50 basis points for the increase to the borrowing base.
These changes are subject to some conditions. The revolver will mature five years after those conditions have been satisfied.
The amendment also provides that the borrower's ratio of total net debt to EBITDA cannot exceed 4.0 to 1.0 for the quarter ended March 31; 4.5 to 1.0 for the quarters ending June 30, Sept. 30, Dec. 31, 2013, March 31, 2014 and June 30, 2014; 4.25 to 1.00 for the quarters ending Sept. 30, 2014 and Dec. 31, 2014 and 4.0 to 1.0 for the quarter ending March 31, 2015 and each quarter thereafter.
Under the acquisition, the company will purchase acreage in the Anadarko Basin in Texas and Oklahoma from Panther Energy Co., LLC for $620 million cash. Closing is expected May 31.
The company expects to fund the acquisition with a $700 million issue of eight-year senior notes.
SunTrust Bank, NA is the administrative agent of the credit facility.
Midstates Petroleum is a Houston-based independent oil and natural gas exploration and production company.
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