LRR Energy LP (NYSE: LRE) has closed its acquisition of oil and natural gas properties in the Stroud field located in Lincoln and Creek counties, Oklahoma, for a purchase price of $38 million.
In connection with the closing of the acquisition, LRE amended its $500 million senior secured revolving credit facility and second lien credit agreement. The credit facility amendment increased the maximum amount of the credit facility to $750 million and extended the term to Oct. 1, 2019.
LRE’s lending group also increased the credit facility borrowing base from $235 million to $260 million. The term loan requires that 50% of net cash proceeds from any equity offering be used to repay term loan borrowings outstanding. The term loan amendment waived this requirement through March 31, 2015. The amendment also extended the maturity date of the term loan to April 1, 2020.
As of Oct. 1, LRE has $233 million of outstanding borrowings under its credit agreement and $50 million of outstanding borrowings under its term loan. As of Oct. 1, LRE has $27 million available under its credit agreement and approximately $6 million of available cash. Management has the option to supplement LRE’s liquidity through its current At-the-Market Offering Program (the ATM Program). Management believes cash flow from operations, the capacity under the credit agreement, and the proceeds from the ATM Program will provide ample financial flexibility to execute its 2014 capital program and distribution strategy.
LRR Energy's properties are located in the Permian Basin region in West Texas and Southeast New Mexico, the Mid-Continent region in Oklahoma and East Texas, and the Gulf Coast region in Texas.