Gulfport Energy Corp. (NASDAQ: GPOR) has completed its acquisition of Paloma Partners III LLC, and has a proposed increase to the company’s borrowing base.
On Aug. 31, Gulfport completed its acquisition of Paloma for a total purchase price of $301.9 million. Paloma holds 24,000 net nonproducing acres in the core of the dry gas window of the Utica shale play in Belmont and Jefferson counties, Ohio. The acreage included in the acquisition overlaps with a number of Gulfport's planned units and is located in the vicinity of existing interstate pipelines with gathering and compression infrastructure already under development. Gulfport intends to move one rig to operate on this acreage beginning in the fourth quarter of 2015. Gulfport funded the Paloma acquisition with a portion of the net proceeds from its previously completed securities offerings.
With regard to the proposed increase to the company’s borrowing base, the Bank of Nova Scotia, as sole lead arranger and administrative agent of Gulfport’s credit facility, as part of the regular fall 2015 borrowing base redetermination process, will be recommending to the lending syndicate an increase of the borrowing base from $575 million to $700 million.
Gulfport expects final approval of the borrowing base increase by the bank syndicate to be completed within the next 30 days. On June 30, Gulfport's revolving credit facility was undrawn with outstanding letters of credit totaling $92.7 million. Pro forma for the proposed increase to the company's borrowing base, Gulfport would have $607.3 million of availability under its revolving credit facility.
Gulfport’s principal producing properties are located in the Utica shale play of Eastern Ohio and along the Louisiana Gulf Coast. In addition, Gulfport holds a sizeable acreage position in the Alberta oil sands in Canada through its 25% interest in Grizzly Oil Sands ULC.