Try this one from Dec 21, 2014 annc - the bolding is mine.
"American Eagle has no outstanding indebtedness on its senior secured revolving credit facility ("Credit Facility") that had an initial borrowing base of up to $60 million as of August 27, 2014. Effective December 24, 2014, the borrowing base was reduced to zero. The Company has been in compliance with the Credit Facility maintenance covenants."
What strikes me as odd was that facility was only put in place months earlier. Reserves report done by Ryder Scott effective Jun 30, '14. The BB was done in conjunction with $175M of Senior Secured 11% Notes issue.
These guys operate in the Bakken - in Divide County - which has quite poor economics (as compared to core counties). Their most recent presentations claim IRRs of 45% -50% BUT on $100 oil (got to look at fine print). When you look even deeper on their premier project, they come up with IRR 47% with payback in 21 months - with WTI from Reserves report at $100.11 and a Realized OIl price of $89.22 (Bakken differential discount presumably).
Wonder if Suntrust Bank asked for a forward looking Reserves Report using front month Nymex averages for 2015 instead of a backward looking 2014 average and said the Reserves are not economic at the price deck so marked it down to zero? Luckily they had not drawn down any amount from the BB.
Might explain why their Capex plan went to effectively zero also (had $48M in cash Sep 30 - be interested to see whats left Dec 30 as they have $4.5 Capex required to finish off completions in Q1'15).
Another that is blowing up is Resolute Energy - just had to take on a 2nd lien loan - effectively to payback some of its Revolver. Guess that was a liquidity crunch.
AKK Price at posting:
4.3¢ Sentiment: None Disclosure: Not Held
SEA Price at posting:
51.5¢ Sentiment: None Disclosure: Not Held
SSN Price at posting:
0.9¢ Sentiment: None Disclosure: Not Held
LNR Price at posting:
21.0¢ Sentiment: Hold Disclosure: Held
