SilverBow Announces Increased Borrowing Base and Maturity Extension of Second Lien Notes

Source: www.gulfoilandgas.com 11/15/2021, Location: North America

SilverBow Resources, Inc. has entered into an amendment to its senior secured revolving credit facility (“Credit Facility”) under which the borrowing base has been increased from $300 million to $460 million in connection with its regularly scheduled semi-annual redetermination and in conjunction with closing its previously announced acquisition on October 11, 2021. Concurrently, the Company has also entered into an amendment to its Second Lien Notes Purchase Agreement (“Second Lien Facility”) which extends the maturity date from December 2024 to December 2026 subject to paying down the principal amount of the Second Lien Facility from $200 million to $150 million. The Company intends to make the $50 million payment later this month.

MANAGEMENT COMMENTS
Sean Woolverton, SilverBow’s Chief Executive Officer, commented, “I would like to thank our bank syndicate for their support as we continue to execute on our key objectives. The 50% increase to our borrowing base reflects the value SilverBow has added through the drillbit, our previously announced acquisitions and improved commodity prices. Our liquidity is now at the highest level it has been since early 2018.”

Mr. Woolverton commented further, “SilverBow is well positioned to play offense as we evaluate strategic M&A and further develop our Eagle Ford and Austin Chalk assets. The Company’s enhanced liquidity broadens our opportunity set, as evidenced by the maturity extension and redemption optionality of our Second Lien Facility. By extending the maturity runway to late 2026, we can be thoughtful on adding accretive assets to the portfolio, generating free cash flow and further enhancing shareholder value.”

LIQUIDITY UPDATE
As of October 31, 2021, the Company had $2.6 million in cash and $199 million of outstanding borrowings under its Credit Facility. Adjusted for the increase to the borrowing base to $460 million, the Company had $261 million of undrawn capacity and $2.6 million in cash, resulting in $264 million of liquidity. This is not inclusive of the aforementioned $50 million paydown of the Second Lien Facility.


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