Magnum Hunter Resources Announces Expanded Credit Facility
Magnum Hunter Resources Corporation announced that its borrowing base under its $350 million senior bank facility, which consists of a $250 million senior revolving credit facility and a $100 million term loan facility, has been increased by $35 million from $200 million to $235 million.
The 17.5% increase in Magnum Hunter’s borrowing base is entirely due to organic growth of the company’s existing proved reserve base due to the successful drilling activities in its three unconventional resource plays. As previously announced, Magnum Hunter’s proved reserves increased by 21% to 45 million BOE from September 30, 2011 to December 31, 2011.
As a result of the new borrowing base and availability under the company’s senior revolving credit facility, as of February 14, 2012, the company had approximately $80 million of cash and existing liquidity under its senior credit facility and total liquidity of approximately $120 million including the Eureka Hunter credit facility. In addition, the company has raised over $21 million year-to-date in our Series D Preferred Stock (non-convertible) and anticipates additional issuances throughout 2012. The additional liquidity from these sales provides the company further financial support to fund its 2012 upstream capital program.
The applicable interest rate margin of the senior revolving credit facility ranges from LIBOR plus 2.25% to LIBOR plus 3.25%, depending on the amount drawn at any given time on the senior revolving credit facility.
Bank of Montreal serves as the administrative agent under the senior revolving credit facility, with Capital One serving as the syndication agent, and Amegy Bank, KeyBank and UBS Securities serving as documentation agents. BMO Capital Markets serves as lead arranger and sole bookrunner. Participating banks in the senior revolving credit facility include Citibank, Credit Suisse, Deutsche Bank Trust Company Americas, Royal Bank of Canada, SunTrust Bank, Goldman Sachs Bank, and Union Bank.
Ronald D. Ormand, EVP and CFO of Magnum Hunter, commented, “We are very pleased to announce another increase in our Company’s borrowing base to $235 million, our sixth increase in the last 12 months… We were also successful in adding a new lender, Royal Bank of Canada, to our bank lending syndicate group. The company remains fully funded on its previously announced 2012 capital budget of $200 million.”
Magnum Hunter Resources Corporation and subsidiaries are an independent exploration and production company engaged in the acquisition, development and production of crude, natural gas and natural gas liquids.
Previously on abfjournal.com: