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| DBLE > SEC Filings for DBLE > Form 8-K on 3-Mar-2009 | All Recent SEC Filings |
3-Mar-2009
Entry into a Material Definitive Agreement, Creation of a Direct Financ
On February 26, 2009, Double Eagle Petroleum Co.(the "Company") entered into a Credit Agreement (the "Credit Agreement") with various lenders, including Bank of Oklahoma N.A. as administrative agent. The Credit Agreement provides for a total credit facility of $75 million, which is limited to the borrowing base of $45 million. The $45 million borrowing base consists of up to $5 million under a term loan and up to $40 million under a revolving loan. The proceeds of the term loan will be used (i) to repay the Company's existing revolving loan with the existing lenders, (ii) current obligations of the Company, (iii) future capital expenditures and (iv) for general corporate purposes.
The loans under the Credit Agreement bear interest at rates that vary depending upon the level of funds borrowed. The loans have an all-in interest rate floor of 4.50 % per annum. Any amounts outstanding under the $5 million term loan mature on July 31, 2009. Amounts outstanding under the revolving loan mature July 31, 2010. We paid Bank of Oklahoma N.A. a structuring fee of $75,000 in connection with the Credit Agreement. In addition, we will pay a commitment fee that varies dependant on the balance of outstanding loans that varies from .375% to .500% per annum based on the unused portion of the approved borrowing base.
The loans under the Credit Agreement are guaranteed by Eastern Washakie Midstream, LLC, our wholly-owned subsidiary. The loans also are secured by a lien on substantially all of our assets. Various affirmative covenants, negative covenants and event of default provisions exist in the Credit Agreement. The primary financial covenants require us to (i)beginning June 30, 2009 maintain a current ratio of 1 to 1 and (ii) maintain a consolidated EBITDA of 1.5 to 1.
The foregoing description does not purport to describe all material terms of the Credit Agreement. For additional terms and conditions, please see the Credit Agreement, Term Note and Revolving Notes attached as Exhibits 10.1, 10.2 and 10.3, incorporated herein by reference.
To the extent applicable, the information set forth above in Item 1.01 is hereby incorporated by reference into this Item 2.03.
On March 3, 2009, we issued a press release announcing that we had entered into the Credit Agreement. The press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference into this Item 7.01.
(b) Not applicable
(c) Not applicable
(d) Exhibits
Exhibit 10.1 Credit Agreement dated February 26, 2009 between Double Eagle Petroleum Co. and Bank of Oklahoma, N.A. et.al
Exhibit 10.2 Promissory Term Note dated February 26, 2009 between Double Eagle Petroleum Co. and Bank of Oklahoma, N.A.
Exhibit 10.3 Revolving Notes dated February 26, 2009 between Double Eagle Petroleum Co. and Bank of Oklahoma, N.A. et.al
Exhibit 99.1 Press release, dated March 3, 2009
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