SM Energy Co. (NYSE: SM) has completed the semi-annual redetermination of its borrowing base under its senior secured revolving credit facility. The borrowing base was reduced to $2 billion from $2.4 billion. This expected reduction was primarily the result of the company’s sale of US Mid-Continent assets for $324 million, completed in the second quarter of 2015, plus adjustments consistent with lower commodity prices.
SM Energy has elected to leave the commitments from the bank group unchanged at $1.5 billion. As of the end of the third quarter of 2015, approximately $184 million was drawn on the credit facility.
The 17% revolver adjustment was in line with expectations, noted Seaport Global Securities analysts, and “with only $184 million of the facility currently utilized and our projections for only a modest outspend in FY16 (~$129 million), we think SM is positioned well,” they continued.