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Prospect News home > News index > List of issuers R > Headlines for Reef Oil & Gas Drilling and Income Fund, LP > News item |
Reef Oil enters $100 million credit agreement with Texas Capital Bank
By Marisa Wong
Madison, Wis., Oct. 20 – Reef Oil & Gas Drilling and Income Fund, LP entered into a $100 million credit agreement on Oct. 14 with Texas Capital Bank, NA for a reducing revolving credit facility and standby letter-of-credit facility, according to an 8-K filing with the Securities and Exchange Commission.
The borrowing base was $4 million at closing and will be reduced monthly by $50,000 unless re-determined by the lender. The borrowing base is subject to semiannual redetermination.
Additionally, the credit agreement includes a $500,000 sub-limit for letters of credit.
The commitment under the credit agreement terminates on Oct. 14, 2017.
Libor loans will bear interest at the greater of Libor plus 300 basis points and 5%.
The company will also incur quarterly commitment fees at a rate ranging from 50 bps.
The credit agreement requires the maintenance of some financial covenants, including a minimum interest coverage ratio and a current ratio.
Reef Oil entered into the credit agreement in connection with its acquisition of some oil and gas interests in La Salle and Frio counties in Texas from Arbol Resources Inc.
The oil and gas company is based in Richardson, Texas.
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