Pioneer's new $47 million senior secured credit facility consists of a $7 million revolving line and letter of credit facility and a $40 million acquisition facility for the acquisition of drilling rigs, drilling rig transportation equipment and associated equipment. The new credit facility carries an interest rate equal to Frost National Bank's prime rate (4.75% at October 29, 2004), can be drawn as needed over the next two years and is secured by certain of the Company's assets, including drilling rigs, associated equipment and receivables. The $47 million facility was led by Frost National Bank and includes the Bank of Scotland and Zions First National Bank.
William D. Hibbetts, Pioneer's Senior Vice President and Chief Financial Officer, stated, "Throughout 2004, we have focused on growth, improving shareholder liquidity and strengthening our balance sheet. To that end, we completed a series of transactions, including a $23.8 million private placement of equity in February, the conversion of $28 million of subordinated debentures into common equity and the issuance of additional common equity through a secondary public offering in August. With the payment of substantially all of our remaining debt in August and September, we are essentially debt free. Through this new credit facility, we are positioned to seize upon attractive acquisition opportunities and continue to expand our asset base."
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