Magnum Hunter Resources Corporation, the Houston, Texas-based oil and natural gas company, has closed on two new credit facilities and refinanced its prior revolving credit facility. The new facilities include a $50 million senior secured first lien reserve-based revolving credit facility, maturing four years after the closing date and a $340 million senior secured second lien term loan, maturing five years after the closing date.
Proceeds from the new term loan were used to repay the outstanding borrowings under the company's prior revolving credit facility (approximately $241 million) along with customary transaction costs, Magnum Hunter announced last week. The new proceeds will be used primarily to fund the company's upstream operations in the Marcellus and Utica Shale plays of West Virginia and Ohio and for general business purposes.
Following the closing of the new credit facilities, the company had total liquidity of $212 million, comprised of $164 million of cash and $48 million of borrowing availability under its new senior secured revolving credit facility. Credit Suisse Securities and BMO Capital Markets acted as joint lead arrangers in the financing.
“Completing this new financing during such turbulent times is a testament to the quality of Magnum Hunter's asset base. We have now increased our liquidity position by approximately $128 million, while at the same time maintaining full operational flexibility,” Gary Evans, chief executive of Magnum Hunter, said in a statement.
Magnum Hunter Resources and its subsidiaries are a Houston, Texas-based independent exploration and oil production company that deals in the acquisition, development and production of crude oil, natural gas and natural gas liquids, primarily in West Virginia, Ohio and North Dakota. The company is currently active in three shale resource plays in North America, namely the Marcellus Shale, Utica Shale and Williston Basin/Bakken Shale.