Daily News: November 28, 2017

Wells Fargo Agents Jones Energy $350MM Facility


Jones Energy completed is fall redetermination. Its borrowing base was set at $350 million and the terms of the loan were modified.

According to a related 8-K filing, Wells Fargo served as administrative agent for the transaction.

The company has been working with its lenders to modify its credit agreement to provide increased financial flexibility, including the ability to access all of its borrowing base and raise additional capital. It achieved both objectives with the amendment.

The total leverage ratio covenant has been suspended through Q1/19. The total leverage ratio covenant will resume beginning March 31, 2019 at 5.25x, stepping down to 5.00x on June 30, 2019, 4.75x on September 30, 2019, 4.50x on December 31, 2019 and 4.00x thereafter. A senior secured debt ratio covenant has been implemented at 2.50x through December 31, 2018, stepping down to 2.25x thereafter.

As a result of these covenant modifications, the company can borrow the full amount of the current borrowing base and remain compliant with its covenants. As of November 20, 2017, the company had $188 million outstanding on the facility and had undrawn liquidity of $162 million under the redetermined $350 million borrowing base.

The amended terms allow Jones Energy to raise up to $350 million of second lien debt, subject to covenant compliance and other typical conditions. Subject to the terms and provisions of the credit agreement, the proceeds of any such offering could be used for drilling and completing wells, debt paydown, or other general corporate purposes.

Jonny Jones, the company’s founder, chairman and CEO, said, “Today we announced a successful outcome with our lending group, a significant step that gives us the flexibility to increase our merge activity in 2018 and beyond. The terms of the amended credit facility allow us to fully access the unborrowed capacity of our revolver and raise additional capital to develop our assets.”

Jones Energy is an independent oil and natural gas company engaged in the development and acquisition of oil and natural gas properties in the Anadarko basin of Texas and Oklahoma.