Item 1.01 Entry into a Material Definitive Agreement.
On April 24, 2020 (the “Effective Date”), the Company’s wholly owned subsidiary, Oasis Petroleum North America LLC, as borrower (the “Borrower”), the Company and the other guarantors entered into that certain Limited Waiver and Fourth Amendment (the “Fourth Amendment”) to the Third Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with Wells Fargo Bank, N.A. as Administrative Agent (the “Administrative Agent”) and Issuing Bank, and each of the Lenders party thereto. Each capitalized term used in this Form 8-K but not otherwise defined herein has the meaning given to such term in the Credit Agreement, as amended by the Fourth Amendment.
The Fourth Amendment amends the Credit Agreement to (1) reduce the Borrowing Base from $1.3 billion to $625 million and (2) reduce the Aggregate Elected Commitment Amounts from $1.1 billion to $625 million. The following additional reductions will be effective on June 1, 2020 (the “June Reduction”) and July 1, 2020 (the “July Reduction”), respectively: (1) the June Reduction consists of Borrowing Base and Aggregate Elected Commitment Amount reductions from $625 million to $612.5 million and (2) the July Reduction consists of additional Borrowing Base and Aggregate Elected Commitment Amount reductions from $612.5 million to $600 million. Neither the Borrower nor the Administrative Agent may cause an Interim Redetermination of the Borrowing Base during the period beginning on the Effective Date and ending on July 1, 2020 (the “Interim Period”). In addition, the Fourth Amendment increases the Letter of Credit commitment under the Credit Agreement from $50 million to $100 million. As of March 31, 2020, the Company had cash and cash equivalents of $134.0 million, total elected commitments of $1,100.0 million under the Credit Agreement and total elected commitments of $575.0 million under the credit facility through its subsidiary Oasis Midstream Partners LP (the “OMP Credit Facility”). In addition, the Company had $522.0 million of borrowings and $18.9 million of outstanding letters of credit issued under the Credit Agreement and $487.5 million of borrowings and $1.7 million of outstanding letters of credit issued under the OMP Credit Facility.
The Fourth Amendment also includes a waiver and forbearance agreement with respect to a third-party surety indemnity obligation (the “Surety Bond”) obtained by a subsidiary of the Company in support of commitments for a transportation agreement. The Administrative Agent advised the Borrower on April 2, 2020 that the Surety Bond constituted additional Debt not permitted under the Credit Agreement and that the Borrower's certifications had failed to reflect the existence of the Surety Bond in its Borrowing Requests. The Fourth Amendment contains a one-time waiver of these Defaults, other than with respect to approximately $29.3 million of additional interest charges as of March 30, 2020. The Fourth Amendment provides for forbearance of such additional interest until the earlier to occur of (i) October 24, 2020 and (ii) an Event of Default. The Administrative Agent and lenders are not obligated to grant any future forbearance.
The Fourth Amendment amends the Applicable Margins and Commitment Fee Rates with respect to ABR Loans, Swingline Loans and Eurodollar Loans, based upon the percentage utilization of the Total Commitments under the Credit Agreement, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commitments Utilization Grid
|
|
|
|
|
|
|
Total Commitments Utilization Percentage
|
< 25%
|
> 25%
< 50%
|
> 50 %
< 75%
|
> 75%
< 90%
|
> 90%
|
|
ABR Loans or Swingline Loans
|
0.750
|
%
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
|
Eurodollar Loans
|
2.250
|
%
|
2.500
|
%
|
2.750
|
%
|
3.000
|
%
|
3.250
|
%
|
|
Commitment Fee Rate
|
0.500
|
%
|
0.500
|
%
|
0.500
|
%
|
0.500
|
%
|
0.500
|
%
|
The Credit Agreement is also amended by the Fourth Amendment to require that, subject to certain exceptions, if at any time the Company and its subsidiaries have cash on hand in an amount exceeding $60 million, such cash must be used to make prepayments of Borrowings under the Credit Agreement. In addition, the financial covenants in the Credit Agreement have been amended to provide that the Company’s ratio of Total Debt to EBITDAX shall not, as of the last day of any fiscal quarter, be greater than 4.00 to 1.00. The Fourth Amendment also implements further restrictions on the ability of the Company to make Investments in OMP, any other Unrestricted Subsidiaries or any DevCo, including a reduction from $100 million to $50 million for permitted aggregate Investments in OMP and any other Unrestricted Subsidiaries, and a cap of $15 million on aggregate Investments in any DevCo. Finally, the Company is prohibited from making Drop Down Dispositions to OMP during the Interim Period if such Drop Down Dispositions, when aggregated with any dispositions of Proved Reserves or limited partner interests in OMP made during such period, would exceed five percent of the Borrowing Base.
The foregoing description of the Fourth Amendment is a summary only and is qualified in its entirety by reference to the complete text of the Fourth Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The information contained above in Item 1.01 includes a description of the forbearance of additional interest charges under the Credit Agreement. To the extent that information is responsive to Item 2.04 it is incorporated herein by reference.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
Hot Features
Premium
