| Item 1.01. | Entry into Material Definitive Agreement. |
Credit Agreement Amendment
On May 3, 2021, Contango Oil & Gas Company (the “Company”) entered into the Fifth Amendment (the “Amendment”) to its Credit Agreement, dated as of September 17, 2019, by and among the Company and JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (the “Credit Agreement”). The Amendment provides for, among other things, (i) an increase of the borrowing base from $120 million to $250 million effective May 3, 2021; (ii) a decrease in the Company’s minimum hedging covenant resulting in requiring hedging for at least 70% of the Company’s projected PDP volumes for 12 full calendar months from the date of delivery of each reserve report and at least 50% of the Company’s projected PDP volumes for months 13 through 24 from the date of delivery of each reserve report; (iii) a decrease in the maximum Total Debt/EBITDAX leverage ratio calculation from 3.5:1 to 3.25:1; (iv) the reinstatement of the minimum current ratio covenant calculation of 1.0:1.0 beginning with the quarter ending June 30, 2021; and (vi) the assumption of commitment amounts by new lenders and increased commitments from existing lenders.
The foregoing description of the Amendment is qualified in its entirety by reference to such Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Director Appointments
On April 28, 2021, the Board of Directors (the “Board”) increased the size of the Board from five to seven directors and appointed Karen Simon and Janet Pasque to fill the vacancies created by the expansion of the Board, effective on April 28, 2021. Concurrent with her election as a director of the Company, Ms. Pasque was appointed to the Compensation Committee and Nominating Committee of the Board. Concurrent with her election as a director of the Company, Ms. Simon was appointed to the Audit Committee and Nominating Committee of the Board.
The Board determined that Ms. Pasque and Ms. Simon are both independent directors under the applicable rules and regulations of the SEC and within the meaning of the NYSE American listing standards. There are no arrangements or understandings between Ms. Pasque or Ms. Simon and any other persons pursuant to which Ms. Pasque or Ms. Simon was selected to serve a director. Additionally, there are no transactions involving the Company and Ms. Pasque or Ms. Simon that the Company would be required to be reported pursuant to Item 404(a) of Regulation S-K.
Ms. Pasque’s and Ms. Simon’s compensation for services as a director will be consistent with that of the Company’s other non-employee directors, as described in the Company’s annual proxy statement filed with the Securities and Exchange Commission on April 30, 2020.
Ms. Simon previously served as Vice Chairman, Investment Banking, at JPMorgan before retiring in December 2019. Over her 36 year banking career, she held a number of leadership positions, including Global Co-Head of Financial Sponsor Coverage, providing M&A and capital raising investment banking services to private equity funds, Co-Head of EMEA Debt Capital Markets and Head of EMEA Oil & Gas coverage, both in London, and most recently she founded JPMorgan’s Director Advisory new client group focused on providing advice to public company Directors. Since retiring in 2019, Ms. Simon has served on the boards of directors of various companies. Ms. Simon is currently a director of two European public companies, one of which she Chairs, Energean plc in London (LON: ENOG) (“Energean”), and Aker ASA in Oslo (OSL: AKER) (“Aker”). Energean is an E&P
