Denbury Announces Amendment and Extension of Bank Credit Facility
14 Agosto 2018 - 08:46AM
Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”)
today announced that it has entered into a Sixth Amendment (the
“Amendment”) to its Amended and Restated Credit Agreement with
JPMorgan Chase Bank, N.A. and other bank lenders (the “Credit
Facility”). As detailed below, certain provisions of the
Amendment expanding the amount of junior lien debt the Company may
incur became effective upon execution of the Amendment, and other
provisions will become effective simultaneously with the closing of
a private offering of $400 million aggregate principal amount of
the Company’s new Senior Secured Second Lien Notes due 2024 (the
“Offering”), the commencement of which is being separately
announced by the Company today.
The Amendment, among other things, extends the
maturity date of the Credit Facility by two years, to December
2021, and increases the amount of junior lien debt that the Company
may have outstanding by $450 million, to an aggregate total amount
of $1.65 billion. In connection with the Amendment, the size
of the bank group has been streamlined to 14 banks and the
aggregate commitment by the banks has been reduced from $1.05
billion to $615 million, which is more than offset by the $450
million increase in junior lien debt capacity. Combined with
the existing junior lien debt capacity, the Company has
approximately $580 million of aggregate junior lien debt capacity
under the amended Credit Facility, enabling the Company to commence
the Offering today.
Mark Allen, Denbury’s Executive Vice President
and CFO, commented, “We are very pleased with the amendment and
extension of our bank credit facility, and we believe these
actions, combined with the closing of the private offering of new
second lien notes announced and commenced today, will provide
Denbury with essentially the same level of liquidity, which we view
as more than sufficient for Denbury’s current plans and operational
flexibility. We also feel very good about the right-sizing of
our bank group, which now consists of 14 top-tier energy banks that
are all supportive of Denbury, our business model and our
future. We greatly appreciate the support we have received
from these banks over the years, and we look forward to continuing
our strong relationship with each of them.
“Denbury’s leverage profile is rapidly
improving, and the progress we have made on debt reduction, cost
savings and operational improvements and efficiencies, together
with improved oil prices, is having a tremendously positive impact
on our balance sheet, and has also put us on a trajectory for
continued improvement. We believe these transactions
announced today are additional positive steps in the right
direction for Denbury and will prove beneficial to all of our
stakeholders.”
In addition to the immediate increase in the Company’s junior
lien debt basket detailed above, upon the Company’s receipt of
proceeds from the closing of the Offering, the following Amendment
provisions will become effective:
- the extension of the maturity date of the Credit Facility to
December 9, 2021, provided that the maturity date may occur earlier
(between February 2021 and August 2021) if the Company’s 9% Senior
Secured Second Lien Notes due 2021 or 6⅜% Senior Subordinated Notes
due 2021 are not repaid or refinanced by their respective maturity
dates;
- the requirement to pay down the Company’s outstanding
borrowings under the Credit Facility by not less than $350
million;
- the reduction of the borrowing base and lender commitments
under the Credit Facility to $615 million; and
- the addition of a financial maintenance covenant with respect
to the Company’s consolidated total debt to consolidated EBITDAX
ratio, which is not to exceed 5.25 to 1.0 through December 31,
2020, and 4.5 to 1.0 thereafter through the maturity date of the
Credit Facility.
This press release contains forward-looking
statements that involve risks and uncertainties that are based on
assumptions that management believes are reasonable based on
currently available information. There is no assurance that
these assumptions will prove to be correct. In addition, any
forward-looking statements represent the Company’s estimates only
as of today and should not be relied upon as representing its
estimates as of any future date. Denbury assumes no
obligation to update its forward-looking statements.
Denbury is an independent oil and natural gas
company with operations focused in two key operating areas: the
Gulf Coast and Rocky Mountain regions. The Company’s goal is
to increase the value of its properties through a combination of
exploitation, drilling and proven engineering extraction practices,
with the most significant emphasis relating to CO2 enhanced oil
recovery operations.
DENBURY CONTACTS:
Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000
John Mayer, Director of Investor Relations, 972.673.2383
Denbury Resources (NYSE:DNR)
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