Berry closed a refinancing of its existing indebtedness on Dec. 24, 2024, providing the company with capital and liquidity to continue progressing its corporate strategy.
“With our refinancing complete, Berry is well positioned with the financial resources to advance our strategic goals and achieve long-term growth,” Fernando Araujo, CEO of Berry, said. “Looking to 2025, we are ready to execute on value enhancing opportunities in both California and the Uinta Basin, where we believe there is potential to drive substantial long-term shareholder value.”
“By successfully addressing our near-term debt maturities, we have the financial flexibility to focus on our core business and pursue our key priorities for 2025 and beyond,” Mike Helm, chief financial officer of Berry, said. “With liquidity of more than $100 million at closing, we remain committed to a disciplined capital allocation strategy and generating free cash flow that will balance delivering sustainable shareholder returns with pursuing our highest capital return opportunities.”
Valor Upstream Credit Partners, which is managed by Breakwall Capital in partnership with Vitol, is the lender on the senior secured term loan credit agreement, dated as of Nov. 6, 2024 entered into by, among others, the company, as borrower, certain subsidiaries of the company party thereto, as guarantors and Breakwall Credit Management, as administrative agent. TCBI Securities, doing business as Texas Capital Securities, served as capital structure advisor to Berry and sole arranger of the senior secured revolving credit agreement, dated as of Dec. 24, 2024, entered into by, among others, the company, as borrower, certain subsidiaries of the company party thereto, as guarantors, and Texas Capital Bank, as lender and administrative agent.
As part of the transactions, the company borrowed $450 million under the term loan credit agreement. Proceeds therefrom will be used to fund the full redemption of the outstanding 7.000% senior notes due 2026 of Berry Petroleum, the company’s wholly-owned subsidiary and to pay fees and expenses relating thereto and with the remaining proceeds to be used to fund capital expenditures and for other general corporate purposes in accordance with the terms of our indebtedness. The redemption of the 2026 notes is expected to occur on Dec. 26, 2024.
The company has also entered into a three-year reserve-based revolving loan under the senior secured revolving credit agreement with Texas Capital Bank as administrative agent, and a syndicate of banks providing for borrowing availability equal to the lesser of the maximum commitments of $500 million, the then effective borrowing base and the elected commitment amount. On the closing date, the borrowing base is $95 million and the elected commitments are $63 million, which would result in a $63 million of borrowing availability under the senior secured revolving credit agreement until the next scheduled redetermination of the borrowing base, which is scheduled to occur in the Spring of 2025. The term loan credit agreement will have a delayed draw term loan commitment that, when aggregated with the available commitments under the senior secured revolving credit agreement, will provide up to $95 million of borrowing availability for working capital and other general corporate purposes.
