Independence Contract Drilling (ICD) signed a commitment letter with Wells Fargo for a revolving senior secured credit facility of up to $40 million, including availability for letters of credit in an aggregate amount at any time outstanding not to exceed $7.5 million.
ICD also entered into a commitment letter with MSD Partners for a senior secured term loan facility of up to $130 million and a delayed draw term loan facility of up to $15 million.
All facilities will be used to support ICD’s acquisition of all of the outstanding equity interests in Sidewinder Drilling.
Availability under the revolver will be subject to a borrowing base determined based on 85% of the net amount of eligible accounts of the ICD, minus reserves. The revolver will be secured by a first priority lien on priority collateral, which will include all accounts receivable and deposit accounts, and a second priority lien on the term priority collateral.
The term loan facilities will mature five years after the execution date and be secured by a first priority lien on collateral other than accounts receivable, deposit accounts and other related collateral pledged as first priority collateral under the revolver and a second priority lien on said collateral.
The proceeds of the term loans will be used to repay any outstanding indebtedness of Sidewinder and ICD as of the closing of the merger, which is expected to occur early in the fourth quarter of 2018.
Independence Contract Drilling provides land-based contract drilling services for oil and natural gas producers in the United States.
Founded in 2011, Sidewinder Drilling builds, owns and operates premium land drilling rigs and provides contract drilling services to exploration and production companies targeting unconventional resource plays in North America.
