New Source Energy Partners LP (OTC: NSLP), due to a pending borrowing base deficiency under its revolving credit facility, will be prevented from paying the quarterly cash distribution on its 11% Series A cumulative convertible preferred units (NYSE: NSLP-A).
"While it was the Partnership's intention to pay this distribution, there are covenants in our credit agreement with our reserve based lending group that prevent our ability to make the payment while in a deficiency,” said Kristian Kos, chairman and CEO. “We are not in a deficiency at this time. However, based on initial communication from our reserve based lending group, we expect to be in a borrowing base deficiency after our biannual redetermination takes place in early October, which will prevent us from making a distribution on Oct. 15. We will be working with our lenders to finalize the new borrowing base over the next several days, as well as exploring alternatives to remedy the deficiency to allow the Partnership to resume making distributions on the preferred units as soon as possible."
New Source Energy Partners is an independent energy partnership engaged in the production of its onshore oil and natural gas properties that extends across conventional resource reservoirs in east-central Oklahoma and in oilfield services that specialize in increasing efficiencies and safety in drilling and completion processes.