Range Resources to refinance its revolver and the Great Lakes revolver with one large bank line

By Sara Rosenberg

New York, June 2 - Range Resources Corp. plans on combining its existing bank debt with that of Great Lakes Energy Partners LLC and restructuring the two facilities into one large facility with a lower interest rate as part of the acquisition of the remaining 50% interest in Great Lakes that it does not already own, company officials revealed in a conference call Wednesday.

Currently, Range Resources has a $375 million revolver with a borrowing base of $240 million and about $171 million drawn.

Great Lakes has a $275 million revolver with a borrowing base of $225 million and about $68 million drawn.

"It's currently contemplated that the bank line will be combined with the old Great Lakes bank line and restructured," officials said in the call. "Among the improvements that will be made is a reduction in the run rate so our Libor rate will vary from 125 [basis points] to 1 7/8 [or 187.5 basis points]."

Borrowings under the new credit facility would be used to help fund the Great Lakes purchase. In addition, the company plans to use equity and/or subordinated debt to help fund the acquisition as well.

Pro forma for the transaction, the company is expected to have "in the ballpark" of $240 million in drawn bank debt and $100 million in subordinated notes, company officials added in the call.

Under the acquisition agreement, Range Resources will pay the seller of Great Lakes $200 million, assume the $68 million of Great Lakes bank debt and retire about $22 million of oil and gas commodity hedges.

The transaction is expected to close by June 30.

Range Resources is a Fort Worth, Texas, independent oil and gas company.

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