Viper Energy gets $500 million senior secured revolver via Wells Fargo

By Tali Rackner

Norfolk, Va., July 14 – Viper Energy Partners LP entered into a senior secured revolving credit agreement on July 8 via agent Wells Fargo Bank, NA, according to an 8-K filing with the Securities and Exchange Commission.

The agreement provides for an up to $500 million revolving credit facility maturing on July 8, 2019, subject to scheduled semiannual and other elective collateral borrowing base redeterminations based on Viper’s oil and natural gas reserves and other factors, and subject to the maximum credit amounts of the lenders thereunder.

Borrowings bear interest at Libor plus a margin of 150 basis points to 250 bps, depending on the amount of the loan outstanding.

There is a quarterly commitment fee that ranges from 37.5 bps to 50 bps on the unused portion.

The borrowing base will be re-determined semiannually with effective dates of April 1 and October 1. In addition, Viper may request up to three additional redeterminations of the borrowing base during any 12-month period. As of July 8, the borrowing base was set at $110 million and Wells Fargo was the only lender under the credit agreement, with a maximum credit amount of $55 million.

The agreement also contains various covenants, including requiring the total debt to EBITDAX ratio to be no more than 4 to 1 and the ratio of current assets to liabilities to be no less than 1 to 1.

EBITDAX will be annualized beginning with the quarter ending Sept. 30 and ending with the quarter ending March 31, 2015.

Proceeds may be used to provide working capital for lease acquisitions, exploration, production operations and development, to purchase equity interests issued by persons primarily engaged in the oil and gas business, subject to certain limitations, and for general corporate purposes.

Wells Fargo Bank is also the bookrunner and lead arranger.

Viper Energy is a Midland, Texas-based oil and natural gas company.

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