Miller Energy Resources announced that it entered into an amendment to its loan agreement with Apollo Investment, which provides for a credit facility of up to $100 million. The amendment increases the amounts available under the credit facility by $20 million and reduces the interest rate on new funds that are borrowed to an initial rate of 9% per annum.
Among other things, the amendment makes the following changes to the Loan Agreement:
1. Increases the total availability under the borrowing base by $20 million, which is available immediately
2. Permits the Company to repay any new borrowings, without any prepayment penalty, until January 31, 2014
3. Reduces the interest rate on all new borrowings from 18% per annum to 9% per annum until January 31, 2014, when it will revert to the original rate.
“I am extremely pleased with this agreement, which reduces our borrowing costs and provides us with greater financial flexibility,” explained David Voyticky, president and acting CFO of Miller. “The expansion in our available credit and the substantial reduction in the interest rate reflect Apollo’s continuing confidence and support in Miller Energy. Having successfully increased cash-flow from several successful new wells over the past six months, this additional lower costing capital from Apollo, and the expectation of receiving ACEs rebates in the next several weeks, we have funded our 2014FY budget. We will only need to raise additional capital during the remainder of our 2014FY if we choose to add projects to our 2014FY CAPEX plan or choose to take advantage of favorable capital markets.”
Miller Energy Resources is an oil and natural gas exploration, production and drilling company operating in multiple exploration and production basins in North America.