Constellation Energy Partners LLC (NYSE Arca: CEP) today announced that, in conjunction with extending the maturity date of its reserve-based credit facility by one year, the company has reduced debt by $42 million to $115.5 million outstanding. The cash used to reduce debt was raised by resetting the fixed price on certain hedges related to the company’s 2012 through 2014 natural gas production to $5.75 per MMBtu.
The company also today reaffirmed its 2011 forecast, including guidance on plans to reduce debt $25 million to $30 million this year, which is in addition to the debt reduction announced today.
“We’ve accelerated debt reduction by restructuring our hedges in a way that does not negatively affect our net asset value or impact our strategic focus, operational plans, or capital program for the future,” said Stephen R. Brunner, President and Chief Executive Officer of Constellation Energy Partners. “We’ve now reduced debt by more than $100 million since first announcing plans for debt reduction in 2009. With the additional debt reduction planned for the remainder of this year, we now expect to be below $100 million in debt outstanding by year-end. Our lower level of debt, coupled with our continued operational successes, improving natural gas prices, and a focus on exploiting the oil potential in our asset base, puts us in a position to consider a wider range of opportunities to increase unitholder value.”
Liquidity UpdateThe company also announced that its lenders have completed their semi-annual review of the borrowing base under its reserve-based credit facility. Pursuant to that review, which takes into account the lower fixed prices stemming from the hedge restructuring, the borrowing base has been set by the lenders at $140.0 million. Hedge Positions The hedge restructuring relates to the company’s NYMEX fixed-for-floating price swaps for natural gas production for the period January 2012 through December 2014. There were no changes to any of the company’s other hedges. After resetting the fixed price on NYMEX hedges in place for the period 2012 through 2014, the company maintains the following NYMEX hedges on its 2012 through 2014 natural gas production:
|Average Price ($/MMBtu)|
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV