Crimson amends revolver, permitting notes sales, changing covenants

By Sara Rosenberg

New York, Dec. 10 - Crimson Exploration Inc. amended its senior secured revolving credit facility, allowing for the issuance of $200 million of senior unsecured notes and revising covenants, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

Under the amendment, the total debt to adjusted EBITDAX ratio is 3.50 times as of the end of any fiscal quarter ending on or prior to Dec. 31, 2010 and 3.25 times thereafter.

The adjusted EBITDAX to cash interest expense ratio is 2.25 times as of the end of any fiscal quarter ending on or prior to Dec. 31, 2010, and 2.75 times thereafter.

In addition, the amendment provides that the borrowing base under the revolver will be redetermined to be $105 million at Jan. 1, 2010.

Any sale of senior unsecured notes will reduce the company's borrowing base by 25% of the net proceeds from the issuance in excess of $150 million.

The amendment was effective on Dec. 7, but is subject to the completion of an at least $100 million equity offering.

If the company fails to close an equity offering prior to Jan. 1, 2010, the revolver borrowing base will be redetermined to be $135 million at Jan. 1, 2010 and will be mandatorily reduced to $105 million in the following months through scheduled reductions.

Wells Fargo is the agent on the deal.

Crimson Exploration is a Houston-based acquirer, developer, exploiter and explorer of oil and natural gas properties.

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