Bill Barrett Corp.’s (NYSE: BBG) semi-annual borrowing base review has been completed with the bank group reaffirming the $375 million borrowing base related to its revolving credit facility maturing in April 2020. The credit facility has $375 million of commitments and there are currently no borrowings under the credit facility.
As part of the redetermination process, the company and its lender group agreed to amend the maintenance covenants in the revolving credit facility by replacing the leverage covenant limiting the maximum total debt to trailing 12-month EBITDAX ratio of 4.0x with a covenant limiting the maximum senior secured debt to trailing 12-month EBITDAX ratio of 2.5x through March 31, 2018, after which the leverage covenant reverts to a maximum total debt to trailing 12-month EBITDAX of 4.0x, as of June 30, 2018. In addition, an interest coverage ratio requirement was included, pursuant to which the ratio of EBITDAX to interest expense may not be less than 2.5 to 1.0 for each quarter through March 31, 2018.
Additionally, Bill Barrett has entered into a definitive agreement to sell certain non-core Uinta Basin properties for after-tax cash proceeds of $27 million. The transaction is expected to close on or before Nov. 30, with an effective date of Sept. 1. Based on the company's internal estimates, the sale price amounts to over 10x estimated 2016 operating cash flow (excluding general and administrative expense) based on current strip pricing. The sale of the properties will not result in a reduction of the company's borrowing base related to its revolving credit facility.