Patterson-UTI Energy, Inc. (NASDAQ:PTEN) Files An 8-K Entry into a Material Definitive AgreementItem 2.03 Entry into a Material Definitive Agreement.
On March 27, 2018, Patterson-UTI Energy, Inc. (the “Company”) entered into an amended and restated credit agreement (the “Credit Agreement”) among the Company, as borrower, Wells Fargo Bank, National Association, as administrative agent, letter of credit issuer, swing line lender and lender, each of the other lenders and letter of credit issuers party thereto, The Bank of Nova Scotia and U.S. Bank National Association, as Co-Syndication Agents, Royal Bank of Canada, as Documentation Agent and Wells Fargo Securities, LLC, The Bank of Nova Scotia and U.S. Bank National Association, as Co-Lead Arrangers and Joint Book Runners.
The Credit Agreement is a committed senior unsecured revolving credit facility that permits aggregate borrowings of up to $600 million, including a letter of credit facility that, at any time outstanding, is limited to $150 million and a swing line facility that, at any time outstanding, is limited to $20 million. Subject to customary conditions, the Company may request that the lenders’ aggregate commitments be increased by up to $300 million, not to exceed total commitments of $900 million. The maturity date under the Credit Agreement is March 27, 2023. The Company has the option, subject to certain conditions, to exercise two one-year extensions of the maturity date.
Loans under the Credit Agreement bear interest by reference, at the Company’s election, to the LIBOR rate or base rate, provided, that swing line loans bear interest by reference only to the base rate. The applicable margin on LIBOR rate loans varies from 1.00% to 2.00% and the applicable margin on base rate loans varies from 0.00% to 1.00%, in each case determined based upon the Company’s credit rating. A letter of credit fee is payable by the Company equal to the applicable margin for LIBOR rate loans times the daily amount available to be drawn under outstanding letters of credit. The commitment fee rate payable to the lenders varies from 0.50% to 0.300% based on the Company’s credit rating.
No subsidiaries of the Company are currently required to be a guarantor under the Credit Agreement.However, if any subsidiary guarantees or incurs debt in excess of the Priority Debt Basket (as defined in the Credit Agreement), such subsidiary is required to become a guarantor under the Credit Agreement.
The Credit Agreement contains representations, warranties, affirmative and negative covenants and events of default and associated remedies that we believe are customary for agreements of this nature, including certain restrictions on the ability of the Company and each subsidiary of the Company to incur debt and grant liens. If the Company’s credit rating is below investment grade, the Company will become subject to a restricted payment covenant, which would require the Company to have a Pro Forma Debt Service Coverage Ratio (as defined in the Credit Agreement) greater than or equal to 1.50 to 1.00 immediately before and immediately after making any restricted payment.The Credit Agreement also requires that the Company’s total debt to capitalization ratio, expressed as a percentage, not exceed 50%. The Credit Agreement generally defines the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the end of the most recently ended fiscal quarter.
The above description of the Credit Agreement is qualified in its entirety by reference to the complete text of the Credit Agreement filed as Exhibit 10.1 hereto, which is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information described in Item 2.03 above is incorporated by reference into this Item 2.03.
Item 2.03 Financial Statements and Exhibits.
(d)Exhibits.
PATTERSON UTI ENERGY INC ExhibitEX-10.1 2 pten-ex101_6.htm EX-10.1 pten-ex101_6.htm Exhibit 10.1 Deal CUSIP Number: 70348EAN3 Facility CUSIP Number: 70348EAP8 AMENDED AND RESTATED CREDIT AGREEMENT Dated as of March 27,…To view the full exhibit click here
About Patterson-UTI Energy, Inc. (NASDAQ:PTEN)
Patterson-UTI Energy, Inc. owns and operates fleets of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company operates in three segments: Contract Drilling, Pressure Pumping, and Oil and Natural Gas. The Company provides contract drilling services to oil and natural gas operators in the continental United States, and western and northern Canada. The Company provides pressure-pumping services to oil and natural gas operators. The Company also invests in oil and natural gas properties. The Company’s Contract Drilling segment markets its contract drilling services to oil and natural gas operators. The Company’s Pressure Pumping segment provides pressure-pumping services to oil and natural gas operators in Texas and the Appalachian region. The Company’s oil and natural gas working interests are located in producing regions of Texas and New Mexico. Pressure pumping services consist of well stimulation, such as hydraulic fracturing.