Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt

v3.22.2.2
Long-Term Debt
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Long-Term Debt
Note 7 – Long-Term Debt
The following table summarizes our debt obligations as of the dates presented:
September 30, 2022 December 31, 2021
Credit Facility $ 215,000  $ 208,000 
9.25% Senior Notes due 2026
400,000  400,000 
Mortgage debt 1
—  8,438 
Other 2
284  2,516 
Total 615,284  618,954 
Less: Unamortized discount 3
(3,227) (3,720)
Less: Unamortized deferred issuance costs 3, 4
(8,559) (9,853)
Total, net 603,498  605,381 
Less: Current portion (41) (4,129)
Long-term debt $ 603,457  $ 601,252 
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1     The mortgage debt related to the corporate office building and related other assets acquired in connection with the Lonestar Acquisition for which assets were held as collateral for such debt. As of December 31, 2021, these assets met the held for sale criteria and were classified as Assets held for sale on the condensed consolidated balance sheets. In July 2022, the mortgage debt was fully repaid in connection with the sale of the corporate office building. See Note 3 for additional information on the sale.
2     Other debt of $2.2 million was extinguished during the nine months ended September 30, 2022 and recorded as a gain on extinguishment of debt.
3     The discount and issuance costs of the 9.25% Senior Notes due 2026 are being amortized over its respective term using the effective-interest method.
4     Excludes issuance costs associated with the Credit Facility, which represents costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 9) and are being amortized over the term of the Credit Facility using the straight-line method.
Credit Facility
As of September 30, 2022, the Credit Facility had a $1.0 billion revolving commitment and a $950 million borrowing base with aggregate elected commitments of $500 million, and a $25 million sublimit for the issuance of letters of credit. Availability under the Credit Facility may not exceed the lesser of the aggregate elected commitments or the borrowing base less outstanding advances and letters of credit. The borrowing base under the Credit Facility is redetermined semi-annually, generally in the Spring and Fall of each year. Additionally, we and the Credit Facility lenders may, upon request, initiate a redetermination at any time during the six-month period between scheduled redeterminations. The Credit Facility is available to us for general corporate purposes, including working capital.
In June 2022, we entered into the Agreement and Amendment No. 12 to Credit Agreement (the “Twelfth Amendment”). The Twelfth Amendment, in addition to other changes described therein, amended the Credit Facility to, effective on June 1, 2022, (1) increase the borrowing base from $725 million to $875 million, with aggregate elected commitments remaining at $400 million and (2) replaced LIBOR with the Secured Overnight Financing Rate (“SOFR”), an index supported by short-term Treasury repurchase agreements.
In September 2022, we entered into the Agreement and Amendment No. 13 to Credit Agreement (the “Thirteenth Amendment”). The Thirteenth Amendment, in addition to other changes described therein, amended the Credit Facility to (1) increase the borrowing base from $875 million to $950 million and (2) increase the aggregate elected commitment amounts under the Credit Facility from $400 million to $500 million.
The outstanding borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) a customary reference rate plus an applicable margin ranging from 1.50% to 2.50%, determined based on the utilization level under the Credit Facility or (b) effective June 1, 2022, a term SOFR reference rate (a Eurodollar rate, including LIBOR prior to June 1, 2022), plus an applicable margin ranging from 2.50% to 3.50%, determined based on the utilization level under the Credit Facility. Interest on reference rate borrowings is payable quarterly in arrears and is computed on the basis of a year of 365/366 days, and interest on Eurodollar borrowings is payable every one, three or six months, at the election of the borrower, and is computed on the basis of a year of 360 days. As of September 30, 2022, the actual weighted-average interest rate on the outstanding borrowings under the Credit Facility was 5.63%. Unused commitment fees are charged at a rate of 0.50%.
The Credit Facility requires us to maintain (1) a minimum current ratio (as defined in the Credit Facility, which considers the unused portion of the total commitment as a current asset), measured as of the last day of each fiscal quarter of 1.00 to 1.00 and (2) a maximum leverage ratio (consolidated indebtedness to adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses, both as defined in the Credit Facility), measured as of the last day of each fiscal quarter of 3.50 to 1.00.
The Credit Facility also contains other customary affirmative and negative covenants as well as events of default and remedies. If we do not comply with the financial and other covenants in the Credit Facility, the lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Credit Facility. As of September 30, 2022, we were in compliance with all debt covenants under the Credit Facility.
We had $215.0 million in outstanding borrowings and $0.7 million in outstanding letters of credit under the Credit Facility as of September 30, 2022. Factoring in the outstanding letters of credit, we had $284.3 million of availability under the Credit Facility as of September 30, 2022. During the nine months ended September 30, 2022 and 2021, we incurred and capitalized approximately $0.8 million and $0.7 million of issue costs associated with amendments to the Credit Facility, respectively.
9.25% Senior Notes due 2026
On August 10, 2021, our indirect, wholly-owned subsidiary completed an offering of $400 million aggregate principal amount of senior unsecured notes due 2026 (the “9.25% Senior Notes due 2026”) that bear interest at 9.25% and were sold at 99.018% of par. Obligations under the 9.25% Senior Notes due 2026 were assumed by ROCC Holdings, LLC (formerly, Penn Virginia Holdings, LLC, hereinafter referred to as “Holdings”), as borrower, and are guaranteed by the subsidiaries of Holdings that guarantee the Credit Facility.
Interest on the 9.25% Senior Notes due 2026 is payable semi-annually in arrears on February 15 and August 15 of each year. We may redeem the 9.25% Senior Notes due 2026 at any time in whole or in part from time to time at specified redemption prices.
The indenture governing the 9.25% Senior Notes due 2026 also contains other customary affirmative and negative covenants as well as events of default and remedies.
As of September 30, 2022, we were in compliance with all debt covenants under the indenture.