DIAMONDBACK ENERGY, INC. (NASDAQ:FANG) Files An 8-K Entry into a Material Definitive AgreementItem 9.01. Entry into a Material Definitive Agreement.
On November 28, 2017, Diamondback Energy, Inc. (“Diamondback”), as parent guarantor, Diamondback O&G LLC, as borrower (the “Borrower”), and certain other subsidiaries of Diamondback, as guarantors, entered into a fifth amendment (the“Fifth Amendment”) to the Second Amended and Restated Credit Agreement, dated as of November 1, 2013, with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (as amended, supplemented or otherwise modified to the date thereof and as further amended by the Fifth Amendment, the“Credit Agreement”).
The Fifth Amendment extended the maturity date to November 1, 2022, and decreased the interest rates applicable to loans under the Credit Agreement. After giving effect to the Fifth Amendment, outstanding borrowings under the Credit Agreement bear interest at a per annum rate elected by the Borrower that is equal to an alternate base rate or LIBOR, in each case plus the applicable margin. The applicable margin ranges from 0.25% to 1.25% per annum in the case of the alternate base rate, and from 1.25% to 2.25% per annum in the case of LIBOR, each of which applicable margin rates is increased by 0.25% per annum if the total debt to EBITDAX ratio is greater than 3.0 to 1.0. The applicable margin depends on the amount of the loan outstanding in relation to the commitment, which is defined as the least of the maximum credit amount, the borrowing base and the elected commitment amount. In the Fifth Amendment, the aggregate maximum credit amount was increased to $5.0 billion, the borrowing base was increased to $1.8 billion, and the Borrower elected a commitment amount of $1.0 billion.
In addition, the Fifth Amendment, among other things, (i) increased the mortgage requirement to 85% of the total value of the oil and gas properties evaluated in the most recent reserve report, (ii) revised the calculation of the total debt to EBITDAX financial covenant to allow the netting of unrestricted cash in the calculation of total debt under certain circumstances, (iii) reduced the frequency of scheduled borrowing base redeterminations from semi-annually to annually in certain circumstances, (iv) removed the cap on the amount of additional indebtedness allowed in the form of unsecured senior or senior subordinated notes, and (v) amended certain other negative covenants.
The preceding summary of the Fifth Amendment is qualified in its entirety by reference to the full text of such 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 9.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 9.01 above is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
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10.1 |
Fifth Amendment to the Second Amended and Restated Credit Agreement, dated as of November 28, 2017, by and among Diamondback Energy, Inc., as parent guarantor, Diamondback O&G LLC, as borrower, certain other subsidiaries of Diamondback Energy, Inc., as guarantors, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto.
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Diamondback Energy, Inc. ExhibitEX-10.1 2 diamondbackex101-12x4x17.htm EXHIBIT 10.1 Exhibit Exhibit 10.1FIFTH AMENDMENTTOSECOND AMENDED AND RESTATEDCREDIT AGREEMENTDATED AS OF NOVEMBER 28,…To view the full exhibit click here
About DIAMONDBACK ENERGY, INC. (NASDAQ:FANG)
Diamondback Energy, Inc. is an independent oil and natural gas company. The Company is focused on the acquisition, development, exploration and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. Its total net acreage position in the Permian Basin is approximately 84,680 net acres. The Company, through its subsidiary Viper Energy Partners LP (Viper), owns mineral interests underlying approximately 46,560 gross (17,060 net) acres primarily in Midland County, Texas in the Permian Basin. Approximately 60% of these net acres are operated by the Company. It has drilled or participated in the drilling 490 gross wells on its leasehold acreage in Permian Basin area, primarily targeting the Wolfberry play. The Permian Basin area covers a portion of western Texas and eastern New Mexico. Its activities are focused on the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations, which it collectively refers as the Wolfberry play.