Double Eagle announced that effective July 22, 2009, the Company's lending group has reaffirmed its borrowing base of $45 million. In addition, an amendment to the credit agreement was entered into which provided for the following:
- The original term loan, which provided for up to $5 million of funds under the borrowing base, will be terminated. As a result of the Amendment, the $3.5 million outstanding under the term loan was rolled into the revolving credit line and is no longer due on July 31, 2009. The revolving credit line will be increased to $45 million, replacing the previous $40 million revolving credit line and a $5 million term loan.
- An additional covenant will be added that requires that as of the end of each fiscal quarter, the ratio of Consolidated Funded Debt (as defined) to Adjusted Consolidated EBITDAX (as defined) for the period of twelve consecutive calendar months shall not be greater than 3.5 to 1.0.
- Borrowing base determinations will occur each June 15 and December 15. The original credit agreement called for determinations on June 1 and December 1.
"The bank group's continued support of our asset portfolio and growth potential during this period of economic, commodity price and financial market challenges underscores the inherent value that we believe lies in Double Eagle," said Richard Dole, Double Eagle's Chairman, President and Chief Executive Officer.
The Company is currently working with the lead bank to consider expanding the bank syndication group to increase our future financing flexibility.