Ranger Energy Services, a provider of well service rigs and associated services to the oil and gas industry, closed a new asset-based lending facility with Wells Fargo as administrative agent and sole lender. The facility includes $75 million of committed liquidity and features an accordion that allows for potential expansion up to $150 million to support future growth opportunities.
Under the terms of the agreement, the ABL will have a tenor of five years. The new facility will consolidate all of Ranger Energy Services’ material existing debt instruments into the new expanded facility, enabling Ranger to simplify its debt structure and reduce its cost of capital. The asset-based facility incorporates a tiered pricing structure based on the secured overnight financing rate (SOFR). The facility includes standard fixed charge coverage ratio covenant tests to be applied.
“Ranger is pleased to announce the refinancing of its debt and enhanced liquidity into a more streamlined and economical facility that provides flexibility to grow in the future,” Stuart Bodden, CEO of Ranger Energy Services, said. “The agreed terms evidence the strides made by the business to strengthen the balance sheet after the acquisitions completed in 2021, as well as the value those acquisitions have brought to Ranger. Going forward, we will be able to access capital when needed to grow at attractive rates without significant administrative burden. This is an important step in Ranger’s journey, and we are excited to continue down our strategic path with the enhanced liquidity now available to us.”
Winston & Strawn served as legal counsel to Ranger Energy Services on the ABL facility.
