Morgan Stanley Closes $76MM Facility to BNK Petroleum
BNK Petroleum announced that its indirect wholly owned subsidiary BNK Petroleum (US) obtained a new $76 million credit facility from Morgan Stanley Capital Group (MSCGI). The initial commitment amount of the new reserve-based facility is $61 million with an additional uncommitted amount of $15 million available at the discretion of MSCGI. A portion of the proceeds from the initial advance under the new facility were used to repay BNK US’ existing Senior First Lien Secured Credit Facility, which had a fully drawn borrowing base of $32 million.
After the repayment of the existing facility, the proceeds from the new facility are primarily intended to fund drilling of Sycamore/Caney and Woodford wells in the Tishomingo field. A portion of the proceeds may also be used for general corporate purposes, including the Company’s European activities. The new facility will bear interest at a per annum rate equal to the greater of 1% and the then three month LIBOR plus an applicable margin ranging from 4% to 9% based on the ratio of outstanding borrowings to present value of proved developed producing reserves discounted at 9% (PDP PV9). The facility provides for principal amortization beginning July 1, 2013 through the maturity of the facility in five years. Amortization is determined based on a formula of PDP PV9 to outstanding debt subject to a minimum monthly amortization of US$300,000 a month beginning in January 2014.
Wolf Regener, President and CEO of BNK said “We are pleased to have received this new, larger facility from MSCGI which will allow the company to drill additional Sycamore/Caney shale wells and speed up the pace of development of its Woodford shale assets. The test results from our Sycamore/Caney exploration wells have been very encouraging and we hope to be able to continue to improve on flow rates in future wells and create substantial value from these new intervals”.
David Lazarus, executive director, Morgan Stanley, stated “We are delighted to provide BNK with a creative solution to fund the development of its Oklahoma producing properties. Highlighting Morgan Stanley Capital Group, Inc.’s extensive experience with innovative financing, hedging, physical supply and offtake solutions, and this facility provides BNK with the development capital that it needs today, with the added benefit of automatic interest rate and amortization reductions as BNK’s asset value increases.”
BNK Petroleum is an international oil and gas exploration and production company focused on finding and exploiting large, predominately unconventional oil and gas resource plays.