Crimson Exploration Redetermines Borrowing Base
Crimson Exploration announced the borrowing base under its senior secured revolving credit facility was redetermined by its bank group at $100 million, compared to the prior level of $105 million. A maximum of $95 million of the $100 million borrowing base may be utilized until the Company enters into additional hedging agreements that would add an incremental $3 million in present value to the value of its reserve base, discounted at 9% assuming the bank-price deck. Once the additional hedges are in place, the full $100 million will be available. As of May 31, 2010, the Company had $38 million outstanding under its Senior Credit Agreement, which under the new borrowing base equates to $62 million of total availability. The next scheduled redermination date for the borrowing base is November 1, 2010. In conjunction with the borrowing base redetermination process, the Senior Credit Agreement was also amended to extend the maturity date to January 8, 2012.
E. Joseph Grady, Senior Vice-President and Chief Financial Officer, provided the following commented, "Crimson maintains a strong relationship with our bank group and the new borrowing base continues to provide Crimson with adequate liquidity to execute its drilling program for 2010 and 2011."
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