HighPeak Energy has entered into a $1.2 billion loan credit agreement to refinance its debt in what the Midland Basin E&P said is one of the largest privately arranged financings for an independent producer.
The refinanced debt, which represents more than 50% of the company’s $2 billion market capitalization, comes after the company said in January it would explore “certain strategic alternatives to maximize shareholder value” up to and including a sale.
HighPeak Energy officials declined to say if the Fort Worth, Texas-based company is positioning itself for a transaction. They also declined to name their lenders and say how many there are.
“I can just say that it’s a broad group, mostly of a lot of energy experience,” HighPeak Vice President Ryan Hightower told Hart Energy.
The senior secured term loan credit agreement includes Texas Capital Bank as the administrative agent and Chambers Energy Management as the collateral agent, according to the HighPeak statement, which did not name other lenders.
RELATED
HighPeak Plans $135.5MM Stock Offering to Stave Off Liquidity Crunch
A portion of the new loan was used to fully repay senior notes due in February 2024 and November 2024 and to pay outstanding borrowings under its reserve-base credit facility.
Fitch Ratings affirmed HighPeak’s issuer default rating at ‘B’ on Sept. 15, the same day HighPeak announced the loan, and Ciaran Fingleton, a Fitch Ratings analyst, told Hart Energy the loan is viewed favorably.
“There’s no debt mature in the next year, so that’s positive, and the company has grown substantially. They’re up to 50,000 barrels per day” of production, Fingleton said. “They have returned to positive free cash flow. … They have enough money to keep operations going in the short term.”
The aggregate principal amount of $1.2 billion has a maturity date of September 2026.
HighPeak CFO Steven Tholen told Hart Energy the company is now moving into the second step of its refinancing.
“We put the term loan in place, and we are working on putting a super priority revolver in place for up to $100 million. … We anticipate that will be done in more or less the next 30 days, plus or minus,” Tholen said.
The HighPeak statement identified the revolver as a “super senior revolving credit facility.”
Recommended Reading
Ithaca Energy to Buy Eni's UK Assets in $938MM North Sea Deal
2024-04-23 - Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.
Triangle Energy, JV Set to Drill in North Perth Basin
2024-04-18 - The Booth-1 prospect is planned to be the first well in the joint venture’s —Triangle Energy, Strike Energy and New Zealand Oil and Gas — upcoming drilling campaign.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.
Equinor Acquires Stake in Standard Lithium Smackover Projects
2024-05-08 - Equinor’s transaction, completed effective May 7, includes interests in Standard Lithium’s flagship South West Arkansas Project and East Texas properties.
Crescent Point Divests Non-core Saskatchewan Assets to Saturn Oil & Gas
2024-05-07 - Crescent Point Energy is divesting non-core assets to boost its portfolio for long-term sustainability and repay debt.