Midstates Petroleum edits credit agreement covenants, adds flexibility

By Wendy Van Sickle

Columbus, Ohio, May 26 – Midstates Petroleum Co., Inc. amended its senior secured credit agreement Wednesday to modify several covenants, according to a press release.

The first amendment to the credit agreement, among other things,

• Removed the requirement to maintain a cash collateral account at the administrative agent in the amount of $40 million, increasing liquidity by $40 million;

• Removed certain negative covenants, such as limitations on capital expenditures and the 20% of borrowing base minimum liquidity requirement;

• Moved the first scheduled borrowing base redetermination to October 2017 from April 2018;

• Amended the required mortgage threshold from 95% of the discounted present value of future net income utilizing a 9% discount rate attributable to proved reserves to 90%;

•Amended the threshold amount for which Midstates is required to provide advance notice to the administrative agent of a sale or disposition of oil and gas properties, which occurs during the period between two successive redeterminations of the borrowing base;

• Amended the required ratio of total net indebtedness to EBITDA that the borrower would be required to maintain to 2.25 to 1.00 for the fiscal quarters ending on Dec. 31, 2016 and March 31, 2017 and to 4.00 to 1.00 for any fiscal quarter thereafter; and

• Provided for additional covenant flexibility.

“This amendment offers Midstates additional liquidity and operational and financial flexibility to grow our premier Miss Lime position at the appropriate pace to maximize value for our shareholders,” Jake Brace, Midstates president and chief executive officer, said in the release.

Midstates Petroleum is a Tulsa, Okla.-based exploration and production company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.