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JPMorgan Chase Agents Amendment to Contango Credit Facility

June 16, 2020, 09:15 AM
Filed Under: Energy

Contango Oil & Gas entered into the Second Amendment (Credit Agreement Amendment) to the Credit Agreement, dated as of September 17, 2019, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the other participating lenders thereto. The Credit Agreement Amendment provides for, among other things, a slight increase in the applicable margin of the borrowing base utilization-based pricing grid, a reduction of the borrowing base to $95.0 million on the effective date of the Credit Agreement Amendment, with further $10.0 million automatic borrowing base reductions on each of June 30, 2020 and September 30, 2020, the suspension of testing the current ratio financial covenant until the fiscal quarter ending March 31, 2022. and certain other changes that are more administrative in nature.  While the reduction in the borrowing base reflects the dramatic decline in commodity prices the energy sector has experienced during the first half of 2020, the Company continues to maintain a good working relationship with its banks, and with the current ratio covenant waived by the banks until the quarter ending March 31, 2022, believes that it will be positioned to continue its previously disclosed business strategy for 2020.  A copy of the Credit Agreement Amendment will be filed on a Form 8-K.

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