RSP PERMIAN, INC. (NYSE:RSPP) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into Material Definitive Agreement. |
RSP Permian, Inc. (the Company) entered into a Credit Agreement,
dated December19, 2016, with RSP Permian L.L.C. (the Borrower),
JPMorgan Chase Bank, N.A., as administrative agent, and the
lenders party thereto (the Credit Agreement). The Credit
Agreement has a maturity date of December19, 2021.
The amount available to be borrowed under the Credit Agreement at
any time is the lesser of the borrowing base and the amount of
the aggregate elected commitments. The borrowing base, initially
$950 million, will be redetermined semiannually each May and
November and depends on the volumes of the Borrowers and certain
of its subsidiaries proved oil and natural gas reserves,
estimated cash flows from these reserves and the Borrowers
commodity hedge positions. The Credit Agreement will provide the
Borrower the ability, subject to certain conditions, including
one or more new and/or existing lenders agreeing to increase its
commitment under the Credit Agreement, to elect the amount of the
aggregate commitments from time to time under the Credit
Agreement up to the amount of the borrowing base then in effect.
The aggregate elected commitment amount is used for purposes of
determining the amount available to be borrowed under the Credit
Agreement and for purposes of calculating certain fees payable
under the Credit Agreement. The Borrower has initially elected an
aggregate commitment amount of $900 million.
The obligations of the Borrower under the Credit Agreement are
secured by liens on substantially all of the Companys and the
Borrowers properties and by guarantees from the Company and
certain subsidiaries of the Borrower, including Silver Hill
Energy Partners, LLC. The obligations of the Borrower under the
Credit Agreement will not be guaranteed by any subsidiary that
the Borrower designates as an unrestricted subsidiary to the
Credit Agreement.
The Credit Agreement contains restrictive covenants that may
limit the Companys ability to, among other things, incur
additional indebtedness, make loans to others, make investments,
enter into mergers, make or declare dividends, enter into
commodity hedges exceeding a specified percentage or our expected
production, enter into interest rate hedges exceeding a specified
percentage of our outstanding indebtedness, incur liens, sell
assets, and engage in certain other transactions without the
prior consent of the lenders.
The Credit Agreement also requires the Company to maintain the
following two financial ratios:
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a working capital ratio, which is the ratio of consolidated current assets (including unused commitments under the Credit Agreement and excluding restricted cash and derivative assets) to consolidated current liabilities (excluding the current portion of long-term debt under the Credit Agreement and derivative liabilities), of not less than 1.0 to 1.0, and |
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a leverage ratio, which is the ratio of the sum of all of the Companys debt to the consolidated EBITDAX (as defined in the Credit Agreement) for the four fiscal quarters then ended, of not greater than 4.25 to 1.0. |
Principal amounts borrowed are payable on the maturity date, and
interest is payable quarterly for base rate loans and at the end
of the applicable interest period for Eurodollar loans. The
Borrower has a choice of borrowing in Eurodollars or at the
alternate base rate. Eurodollar loans bear interest at a rate per
annum equal to an adjusted LIBOR rate (equal to the quotient of:
(i)the LIBOR rate divided by (ii)a percentage equal to 50% minus
the maximum rate on such date at which the Administrative Agent
is required to maintain reserves on Eurocurrency Liabilities as
defined in and to Regulation D of the Board of Governors of the
Federal Reserve System) plus an applicable margin ranging from
200 to 300 basis points, depending on the percentage of the
aggregate elected commitments utilized. Alternate base rate loans
bear interest at a rate per annum equal to the greatest of:
(i)the agent banks referenced rate, (ii)the federal funds
effective rate plus 50 basis points, and (iii)the adjusted LIBOR
rate plus 100 basis points, plus an applicable margin ranging
from 100 to 200 basis points, depending on the percentage of the
aggregate elected commitments utilized. The Borrower will also
pay a commitment fee of 0.375% to 0.50% charged on the aggregate
elected commitment amount, based on the percentage of the
aggregate elected commitments utilized. The Borrower may repay
any amounts borrowed prior to the maturity date without any
premium or penalty other than customary LIBOR breakage costs.
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| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information included in Item1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item2.03 of this
Current Report on Form 8-K.
| Item9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
|
Exhibit No. |
Description |
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| 10.1 |
Credit Agreement, dated as of December19, 2016, among RSP Permian, Inc., RSP Permian, L.L.C., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto. |
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About RSP PERMIAN, INC. (NYSE:RSPP)
RSP Permian, Inc. is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The Company operates through the oil and natural gas exploration and production industry in the United States segment. The Company’s properties are located on contiguous acreage blocks in the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Dawson, Ector and Glasscock. The Company has drilled Lower Spraberry horizontal well and a Middle Spraberry horizontal well in the Permian Basin. In addition, it has also drilled a Wolfcamp B horizontal well in the North Midland Basin. The Company’s estimated proved oil and natural gas reserves are approximately 159.2 million barrels of oil equivalent (MMBoe). Of the Company’s reserves, approximately 41% were classified as Proved developed producing. RSP PERMIAN, INC. (NYSE:RSPP) Recent Trading Information
RSP PERMIAN, INC. (NYSE:RSPP) closed its last trading session down -0.35 at 44.85 with 2,196,552 shares trading hands.