Battalion Oil Corp. has closed an agreement with a group of lenders for a new first lien delayed draw term loan facility for up to $235 million bearing interest of LIBOR plus 7.00% on drawn amounts.
Initial borrowings of $200 million will allow Battalion to repay all outstanding loans and obligations under the Company's previous senior revolving credit facility and add significant cash to the balance sheet after fees and expenses. The Company will have approximately $35 million of additional capacity under the Term Loan which will be available for future development of the Company's Monument Draw asset.
Richard Little, the Company's CEO, commented, "Coming off a strong quarter, we are pleased to announce a strategic refinancing. This new capital not only allows for a complete repayment of our previous credit facility, but also provides ample liquidity to accelerate the development of our Monument Draw asset. I would like to thank our previous bank group for their support as we transition to this new facility.
"Since joining Battalion in the summer of 2019, our team has methodically reduced costs, improved flow assurance, and positioned the company to take advantage of the unique strengths our assets have to offer. We have completed a lot of the heavy lifting and have created an asset base that can compete with some of the best wells in the basin. We look forward to returning to growth through the drill bit while locking in strong returns through an aggressive hedge program."
Macquarie Group served as sole lead arranger for the Term Loan, and is serving as a lender, letter of credit provider, and a hedge counterparty for the Company.
Weil, Gotshal & Manges LLP served as legal advisor to Battalion and Sidley Austin LLP served as legal advisor to the lending group.
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