Proceeds will be used to repay $35 million senior credit facility
By Devika Patel
Knoxville, Tenn., Dec. 23 - Resaca Exploitation, Inc. said it arranged two credit facilities. It will raise $95 million by Jan. 7.
On Dec. 21, Resaca arranged a $20 million four-year unsecured credit facility with Chambers Energy Capital, LP and NGP Capital Resources Co. Resaca will draw the full amount in one tranche. The facility has a 9.5% coupon, which may be paid in kind for the first two years at 12%.
The two investors also received warrants for about 4.8 million shares, which are exercisable at 120% of the volume-weighted average closing share price for the 10 trading days immediately prior to the closing date.
Proceeds from this facility will be used to repay Resaca's $35 million senior credit facility and for general corporate purposes.
In addition to the that facility, the company received a commitment from Regions Bank for a new three year $75 million senior secured revolving credit facility with an initial borrowing base of $33 million. Based on values assigned to crude oil and natural gas properties which may be either acquired or discovered over time, the company's borrowing base may be increased up to $75 million.
The interest rate margin for this facility will range from Libor plus 275 basis points to Libor plus 325 bps, subject to an overall interest rate floor of 4%. The initial interest rate will be 4%. By comparison, the current interest rate on the company's senior credit facility is 8%.
Proceeds from this facility will be used to repay and refinance Resaca's existing senior credit facility, fund future acquisitions and for general corporate purposes.
The facilities will settle on the same date.
The oil and gas company has headquarters in Houston.
| Issuer: | Resaca Exploitation, Inc.
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| Issue: | Convertible credit facility
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| Amount: | $95 million
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| Pricing date: | Dec. 23
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| Settlement date: | Jan. 7
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| Stock symbol: | London: RSOX
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| Stock price: | 1.57p at close Dec. 23
|
|
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| Chambers facility
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| Amount: | $20 million
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| Maturity: | Four years
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| Coupon: | 9.5%, or 12% in kind for first two years
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| Warrants: | For about 4.8 million shares
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| Warrant strike price: | 120% of the volume weighted average closing share price for the 10 trading days immediately prior to the closing date
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| Regions facility
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| Amount: | $75 million
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| Maturity: | Three years
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| Coupon: | Ranging from Libor plus 275 basis points to Libor plus 325 bps, floor of 4%
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| Warrants: | No
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