Another BB redetermination that may offer some insight ... it is...

Another BB redetermination that may offer some insight ... it is primarily a gas producer (but then gas prices have actually been improving relative to oil) but that product also is facing demand challenges, particularly LNG presently

The company reported adjusted EBITDAX of $128.3M (so roughly our size) from production of 1,053,799 Mcfepd (~168MBoepd) with ASP after hedging of ~$61/Bbl and $2/Mcf ... so very well hedged (also like us). No free cash flow though per their calculation
https://ir.gulfportenergy.com/all-sec-filings/content/0001193125-20-136391/0001193125-20-136391.pdf



The takeaway?
Their $1.2B BB (elected at $1B) prior to May redetermination, saw a large cut (42% at BB and 30% from commitment level).
Like CPE, a Senior Secured Debt/EBITDAX ratio of 2x (that's tight) ... and suspension of Net Funded Debt/EBITDAX till Sep 2021 (clearly they would breach that covenant). No Asset Coverage requirement
Like CPE, also a Minimum Liquidty (anti hoarding) provision

Where their Balance Sheet differs is the large amount of Unsecured Debt ... which one presumes will be "swapped" for 2L Notes. Their liquidity is high (~$265M), with their $700M BB as its only drawn to $108M (but also have $327M of outstanding letters of credit).

From an "asset perspective" SNDE is far better (IMO).

My bet for SNDE having looked at a few others now
1. BB cut by 20% - 30% ... so reduction from $210M down to $147M - $168M
2. SNDE may may their election equal to the max BB .... so I'll guess in the ~$150M
3. Whatever the price deck used, we'll see a Net SENIOR SECURED/EBITDAX ratio appear and they will suspend the Net Debt/EBITDAX to a future time
4. An addition of a Minimum Liquidity Covenant (say 10% of drawn amount or $15M)
5. The problem child becomes the 2L secured notes (and the Asset Coverage Ratio if they used a current price deck) ... thinking they might have to follow the herd then trying to exchange these notes for higher yielding unsecured notes maturing in 5 Years. And that might put some strain on the Interest Coverage ration if oil prices do not recover into the $50s ... because oil below $50 doesn't do much for hedging and the ability to actually pay back the debt.

That's going to constrain liquidity for SNDE (which becomes problematic as that tends to affect solvency because without continued drilling and production cash flow and reserve additions shrink which puts further pressure on covenants etc.).

It does however keep SNDE in the game.