"This increase in our credit facility not only provides us additional coverage for our 2006 CAPEX budget of $65 million, but also provides us the flexibility for possible increases to our CAPEX budget, while aggressively seeking additional acquisitions," said Tim Rochford, Arena's president and CEO. Prior to the increase, the credit facility had a $50 million maximum, with a $35 million borrowing base. The agreement was extended for three years from the date of closing.
The existing agreement was modified and restated to incorporate a syndicated credit agreement, with MidFirst Bank remaining as agent for the syndicate, which includes Compass Bank and Bank of Scotland. The interest rate on the credit facility is a floating rate equal to the 30-, 60-, or 90-day LIBOR rate, plus 2 percent.
Arena's current exploration, development, and production operations are in Texas, Oklahoma, Kansas, and New Mexico.
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