W&T Offshore amends revolver for $250 million initial borrowing base

By Wendy Van Sickle

Columbus, Ohio, Oct. 24 – W&T Offshore, Inc. entered into a sixth amended and restated credit agreement on Oct. 18 in connection with the issuance of $625 million five-year 9¾% second-lien notes, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement provides for a $750 million revolving credit and letter-of-credit facility with an initial borrowing base of $250 million and a $30 million sublimit for letters of credit.

The credit facility matures on Oct. 18, 2022.

The credit agreement requires semi-annual borrowing base redeterminations based on reserve reports.

Borrowings bear interest at Libor plus a margin ranging from 250 basis points to 350 bps, based on the use percentage.

TD Securities (USA) LLC, SG Americas Securities, LLC and Natixis, New York Branch are the bookrunners and are lead arrangers along with Morgan Stanly Senior Funding, Inc. and ABN Amro Capital USA LLC.

Societe Generale and Natixis are the co-syndication agents, and Morgan Stanley and ABN Amro are the co-documentation agents.

Toronto Dominion (Texas) LLC is the administrative agent.

The credit agreement requires the company to maintain a ratio of consolidated current assets to consolidated current liabilities of at least 1 time for each fiscal quarter.

W&T will also be required to maintain a ratio of consolidated total debt to EBITDAX of no greater than 3.5 times for the fiscal quarters ending Dec. 31 and March 31, 2019, 3.25 times for the fiscal quarters ending June 30, 2019 and Sept. 30, 2019 and 3 times for the fiscal quarters ending Dec. 31, 2019.

The company used proceeds of the revolver and the new notes, as well as cash on hand, to repay and retire its 11% 1.5-lien term loan and 9% second-lien term loan.

Additionally, W&T plans to use these same funding sources to redeem or repurchase in full all of its outstanding 8½% senior unsecured notes due 2019, 9%/10¾% second-lien PIK toggle notes due 2020 and 8½%/10% third-lien PIK toggle notes due 2021.

W&T has repurchased $464.4 million of those notes so far in a tender offer that ends on Oct. 31 and has called the remaining $63.8 million of notes for redemption on Nov. 17.

W&T Offshore is a Houston-based oil and natural gas exploration and production company.

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