This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

LRR Energy, L.P. Announces New $50 Million Senior Secured Second Lien Term Loan Facility And Additional Commodity Hedges

LRR Energy, L.P. (NYSE:LRE) ("LRE" or "LRR Energy") announced today that it, as guarantor, and LRE Operating, LLC, its wholly owned subsidiary, as borrower, have entered into a $50 million senior secured second lien term loan facility (“term loan”) with Wells Fargo Energy Capital, Inc. The term loan increases LRE’s debt capacity and provides additional liquidity as LRE continues to execute its business strategy.

The term loan matures on January 20, 2017 and has an initial borrowing rate of LIBOR plus 5.5% through March 31, 2013. The borrowing rate increases to LIBOR plus 7.0% from April 1, 2013 through December 31, 2013 and the borrowing rate will remain at LIBOR plus 8.5% from January 1, 2014 until maturity. The term loan has customary covenants, including financial covenants requiring LRE to not exceed a maximum total debt to EBITDAX ratio and to maintain a minimum current ratio and minimum proved reserve PV-10 to total debt ratio.

Borrowings under the term loan will be used to partially repay amounts outstanding under LRE’s $500 million senior secured revolving credit facility (“senior facility”). Pro forma for the term loan, LRE will have $50.0 million of outstanding borrowings under the term loan and $172.8 million of outstanding borrowings under the senior facility. The borrowing base under LRE’s senior facility will remain at $240.0 million with undrawn availability of $67.2 million.

Consistent with its hedging strategy, LRE entered into additional hedging contracts for the remainder of 2012 and 2013. As of June 28, 2012, LRE had the following outstanding commodity derivative contracts:
  Index   2H 2012   2013   2014   2015   2016
Natural Gas Positions
Swaps (MMBtus) NYMEX-HH 2,080,305 7,267,590 5,242,970 4,707,725 3,015,370
Weighted average price $ 5.67 $ 5.15 $ 5.71 $ 5.92 $ 4.29
Collars (MMBtus) NYMEX-HH 1,410,560
Floor-Ceiling price $ 4.75-7.31 $ $ $ $
Puts (MMBtus) NYMEX-HH 232,285 178,710
Strike price $ 2.00 $ 3.00 $ $ $
Total (MMBtus) NYMEX-HH 3,723,150 7,446,300 5,242,970 4,707,725 3,015,370
Weighted average price (1) $ 5.09 $ 5.10 $ 5.71 $ 5.92 $ 4.29
Oil Positions
Swaps (Bbls) NYMEX-WTI 305,575 620,773 332,384 289,955 61,413
Weighted average price $ 98.70 $ 95.19 $ 99.56 $ 97.60 $ 89.90
Puts (Bbls) NYMEX-WTI 5,250
Strike price $ 70.00 $ $ $ $
Total (Bbls) NYMEX-WTI 310,825 620,773 332,384 289,955 61,413
Weighted average price (1) $ 98.22 $ 95.19 $ 99.56 $ 97.60 $ 89.90
NGL Positions
Swaps (Bbls) Mont Belvieu 93,528 144,323
Weighted average price $ 51.34 $ 50.49 $ $ $
(1) Weighted average prices include swap prices, collar floor prices and put strike prices.

Jaime Casas, Vice President and Chief Financial Officer, commented, “We are very pleased to have closed our new second lien term loan. We believe that the term loan, along with our existing senior facility, cash on hand and expected cash flows from operations, will continue to provide us with ample working capital to consistently execute on our strategy, including pursuing all of our planned 2012 capital expenditures, making all of our distributions as well as providing us with incremental debt capacity for future acquisitions and growth. Additionally, we continue to enter into additional commodity hedges to protect our cash flows and distributions.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 -2.67%
FB $104.07 -5.81%
GOOG $683.57 -3.45%
TSLA $162.60 -7.26%
YHOO $27.97 -4.05%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs