Resolute Energy lifts borrowing base to $485 million, extends to 2018

By Toni Weeks

San Luis Obispo, Calif., March 25 - Resolute Energy Corp. again amended its credit agreement on March 22 with Wells Fargo Bank, NA as administrative agent, according to an 8-K filed Monday with the Securities and Exchange Commission.

In connection with the company's acquisition of a 32.35% interest in certain oil and gas properties in the Permian Basin near Midland, Texas, the semiannual redetermination of its borrowing base was completed, resulting in an increase to $485 million, which consists of a $445 million conforming tranche and a $40 million non-conforming tranche.

The maturity date of the $1 billion revolving credit facility was extended to March 2018 from April 2017. The non-conforming tranche expires March 22, 2014.

The interest rate is Libor plus 150 basis points to 250 bps, with the margin depending on the then-current level of borrowing base usage. If the company uses the non-conforming tranche, the margin will be 300 bps. There is also a commitment fee of 37.5 bps to 50 bps.

The amendment also modified the leverage ratio covenant, setting the maximum ratio to 4.50 to 1.00 for all fiscal quarters ending Dec. 31, 2013, to 4.25 to 1.00 for the fiscal quarter ending March 31, 2014 and to 4.00 to 1.00 for all fiscal quarters ending June 30, 2014 and after that.

Bank of Montreal is the syndication for the facility. Barclays Bank plc, Citibank, NA and US. Bank NA are co-documentation agents. Wells Fargo Securities, LLC and BMO Capital Markets are the joint bookrunners and joint lead arrangers.

Resolute Energy is a Denver-based independent oil and gas company.

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