Debt | 9 Months Ended |
Oct. 31, 2014 |
Debt [Abstract] | ' |
Debt | ' |
7. DEBT |
As of the dates indicated in the table below, the Company’s debt consisted of the following: |
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(in thousands) | | 31-Oct-14 | | 31-Jan-14 |
5% convertible note | | $ | 134,200 | | $ | 129,290 |
TUSA credit facility | | | 33,000 | | | 183,000 |
RockPile credit facility | | | 51,616 | | | 21,515 |
Other notes and mortgages payable | | | 10,175 | | | 9,403 |
TUSA 6.75% notes | | | 450,000 | | | - |
Total debt | | | 678,991 | | | 343,208 |
Less current portion of debt: | | | | | | |
RockPile credit facility | | | - | | | -8,450 |
Other notes and mortgages payable | | | -416 | | | -401 |
Total long-term debt | | $ | 678,575 | | $ | 334,357 |
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5% Convertible Note |
On July 31, 2012, the Company sold to NGP Triangle Holdings, LLC a $120.0 million Convertible Note (the “5% Convertible Note”) that became convertible after November 16, 2012 into the Company’s common stock at a conversion rate of one share per $8.00 of note principal. |
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The 5% Convertible Note accrues interest at a rate of 5.0% per annum, compounded quarterly, on each December 31, March 31, June 30 and September 30, and on the date of any redemption, conversion or exchange of the 5% Convertible Note. Such interest is paid-in-kind by adding to the principal balance of the 5% Convertible Note, provided that, after October 31, 2017, the Company has the option to make such interest payments in cash. As of October 31, 2014, $14.2 million of accrued interest has been added to the principal balance of the 5% Convertible Note. |
TUSA Credit Facility |
On April 11, 2013, TUSA entered into an Amended and Restated Credit Agreement, which was subsequently amended on July 30, 2013, October 16, 2013, January 13, 2014, May 9, 2014, May 14, 2014, and June 6, 2014 (as amended, the “TUSA Credit Facility”). |
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Borrowings under the TUSA Credit Facility mature on October 16, 2018 and bear interest, at TUSA’s option, at either (i) the ABR (the highest of (A) the administrative agent’s prime rate, (B) the federal funds rate plus 0.5%, or (C) the one-month Eurodollar rate (as defined in the TUSA Credit Facility) plus 1%), plus an applicable margin that ranges between 0.50% and 1.50%, depending on TUSA’s utilization percentage of the then effective borrowing base, or (ii) the Eurodollar rate plus an applicable margin that ranges between 1.50% and 2.50%, depending on TUSA’s utilization percentage of the then effective borrowing base. |
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The TUSA Credit Facility contains various covenants and restrictive provisions that may, among other things, limit TUSA’s ability to sell assets, incur additional indebtedness, make investments or loans and create liens. In addition, the facility contains financial covenants requiring TUSA to: (i) maintain a ratio of consolidated current assets to consolidated current liabilities (as those terms are defined in the TUSA Credit Facility) of at least 1.0 to 1.0 and (ii) maintain a ratio of consolidated debt to consolidated EBITDAX (as those terms are defined in the TUSA Credit Facility and determined as of the end of each fiscal quarter for the then most-recently ended four fiscal quarters) that is not greater than 4.0 to 1.0. As of October 31, 2014, TUSA was in compliance with all covenants under the TUSA Credit Facility. |
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On November 25, 2014, TUSA entered into a Second Amended and Restated Credit Agreement (“the TUSA Credit Agreement”), which provides for a $1.0 billion senior secured revolving credit facility, with a sublimit for the issuance of letters of credit equal to $15.0 million. |
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The lenders will redetermine the borrowing base under the TUSA Credit Agreement on a semi-annual basis by the beginning of each May and November. In addition, each of TUSA and the lenders may request an unscheduled borrowing base redetermination twice during each calendar year. If at any time the borrowing base is less than the amount of outstanding credit exposure under the facility, TUSA will be required to (i) prepay the principal amount of the loans in an amount sufficient to eliminate the excess, (ii) pledge additional collateral, (iii) prepay the excess in three equal monthly installments, or (iv) any combination of options (i) through (iii). As of November 25, 2014, the borrowing base was set by the lenders at $435.0 million. |
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TUSA will pay a per annum fee on all letters of credit issued under the TUSA Credit Agreement, which fee will equal the applicable margin for loans accruing interest based on the eurodollar rate and a fronting fee to the issuing lender equal to the greater of 0.125% of the letter of credit amount and $500 per letter of credit. TUSA will pay a commitment fee that ranges between 0.375% and 0.50% per annum on the unused availability under the TUSA Credit Agreement. |
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The TUSA Credit Agreement is collateralized by certain of TUSA’s assets, including (1) at least 80% of the adjusted engineered value of TUSA’s oil and gas interests evaluated in determining the borrowing base for the facility, and (2) all of the personal property of TUSA and its subsidiaries. The obligations under the TUSA Credit Agreement are guaranteed by TUSA’s domestic subsidiaries. |
Second Lien Credit Facility |
On June 27, 2014, TUSA entered into a Second Lien Credit Agreement (the “Second Lien Credit Facility”), which provided for a $60.0 million second priority secured credit facility, which was funded at signing. All borrowings under the Second Lien Credit Facility were scheduled to mature on October 16, 2019 (nine months after the maturity of the TUSA Credit Facility). Borrowings under the Second Lien Credit Facility bore interest, at our option, at either (i) LIBOR (subject to a floor) plus a margin of 7% or (ii) a base rate (subject to a floor) plus a margin of 6%. The Second Lien Credit Facility also provided that no prepayment fees would be payable for prepayments made during the first twelve months. |
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Upon issuance of the TUSA 6.75% Notes on July 18, 2014, TUSA terminated the Second Lien Credit Facility and repaid all amounts owing thereunder. |
RockPile Credit Facility |
On March 25, 2014, RockPile entered into a Credit Agreement (the "RockPile Credit Facility") to provide a $100.0 million senior secured revolving credit facility with an accordion feature that allows for the expansion of the facility up to an aggregate of $150.0 million. |
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Borrowings under the RockPile Credit Facility bear interest, at RockPile's option, at either (i) the alternative base rate (the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.5%, or (c) the one-month adjusted Eurodollar rate (as defined in the RockPile Credit Facility) plus 1.0%), plus an applicable margin that ranges between 1.5% and 2.25%, depending on RockPile's leverage ratio as of the last day of RockPile's most recently completed fiscal quarter, or (ii) the Eurodollar rate plus an applicable margin that ranges between 2.50% and 3.25%, depending on RockPile's leverage ratio as of the last day of RockPile's most recently completed fiscal quarter. All borrowings under the RockPile Credit Facility mature on March 25, 2019. |
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RockPile will pay a commitment fee that ranges between 0.375% and 0.50% per annum on the unused availability under the RockPile Credit Facility. RockPile will also pay a per annum fee on all letters of credit issued under the RockPile Credit Facility, which will equal the applicable margin for loans accruing interest based on the Eurodollar rate and a fronting fee to the issuing lender equal to 0.125% of the letter of credit amount. Triangle is not a guarantor under the RockPile Credit Facility. As of October 31, 2014, the weighted-average interest rate on the loan was 3.39% and $51.6 million was outstanding under the facility. |
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The RockPile Credit Facility contains financial covenants requiring RockPile to comply with the following: (i) the ratio of RockPile’s consolidated debt to EBITDA (as defined in the RockPile Credit Facility) may not be greater than 2.75 to 1.00 (determined as of the end of each fiscal quarter for the then most-recently ended four fiscal quarters) and (ii) RockPile must maintain a ratio of Adjusted EBITDA to Fixed Charges (as defined in the RockPile Credit Facility) of at least 1.25 to 1.00 quarterly. As of October 31, 2014, RockPile was in compliance with all financial covenants under the RockPile Credit Facility. |
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On November 13, 2014, RockPile entered into Amendment No. 1 to Credit Agreement and Incremental Commitment Agreement (“Amendment No. 1”), which amended the RockPile Credit Facility to increase the borrowing capacity under the facility from $100.0 million to $150.0 million. Following Amendment No. 1, the facility maintained the accordion feature that allows for expansion of the facility by up to an additional $50.0 million, resulting in aggregate borrowing capacity of $200.0 million. Amendment No. 1 also modified covenants in the RockPile Credit Facility related to certain restrictions on the payment of dividends and distributions and increased the amount of permitted capital expenditures. |
TUSA 6.75% Notes |
On July 18, 2014, TUSA entered into an indenture (the “Indenture”) among TUSA, Foxtrot Resources LLC (the “Guarantor”), a TUSA wholly-owned subsidiary, and Wells Fargo Bank, National Association, as trustee, governing the terms of TUSA’s $450.0 million aggregate principal amount of TUSA 6.75% Notes due 2022 (the “TUSA 6.75% Notes”). |
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The TUSA 6.75% Notes were issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act. The TUSA 6.75% Notes are senior unsecured obligations of TUSA and are guaranteed on a senior unsecured basis by the Guarantor and another TUSA wholly-owned subsidiary that became a guarantor of the TUSA 6.75% Notes in early December 2014. The TUSA 6.75% Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. |
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The TUSA 6.75% Notes bear interest at a rate of 6.75% per year, accruing from July 18, 2014. Interest on the TUSA 6.75% Notes is payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2015. The TUSA 6.75% Notes will mature on July 15, 2022, subject to earlier repurchase or redemption in accordance with the terms of the Indenture. The Company incurred $10.5 million of offering costs which have been deferred and are being recognized on the effective interest method over the life of the notes. |
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TUSA may redeem some or all of the TUSA 6.75% Notes at any time prior to July 15, 2017 at a price equal to 100.0% of the principal amount of the notes redeemed plus accrued and unpaid interest, if any, to the redemption date and a make-whole premium set forth in the Indenture. On or after July 15, 2017, TUSA may redeem some or all of the notes at any time at redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to the redemption date. In addition, at any time prior to July 15, 2017, TUSA may redeem up to 35% of the aggregate principal amount of the TUSA 6.75% Notes at a specified redemption price set forth in the Indenture plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of certain equity offerings. If TUSA experiences certain change of control events, TUSA must offer to repurchase the TUSA 6.75% Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the redemption date. |
The Indenture contains covenants that, among other things, restrict TUSA’s ability and the ability of any guarantor subsidiary to sell certain assets; make certain dividends, distributions, investments and other restricted payments; incur certain additional indebtedness and issue preferred stock; create certain liens; enter into transactions with affiliates; designate subsidiaries as unrestricted subsidiaries, and consolidate, merge or sell substantially all of TUSA’s assets. These covenants are subject to a number of important exceptions and qualifications. As of October 31, 2014, TUSA was in compliance with all covenants under the TUSA 6.75% Notes. |
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