Contango gets commitment for credit facility, to acquire assets of Will Energy
Contango Oil & Gas announced that the company has received a commitment from JPMorgan, Royal Bank of Canada and Cadence Bank, N.A. to provide a senior secured reserve-based revolving credit facility of up to $500M, which is expected to replace the current credit facility which matures on October 1. The initial borrowing base under the New Credit Facility is expected to be $65M. Additionally, if the Pending Acquisition is consummated on or prior to November 30, 2019, then, subject to certain conditions, the borrowing base is expected to increase to $80 million. The New Credit Facility will have a five year term. The New Credit Facility will be guaranteed by certain of the Company's subsidiaries and secured by substantially all of Contango's assets and the assets of the guarantors thereunder, including not less than 85% of the total value of the Company's proved oil and gas properties. The commitment letter provides that the New Credit Facility is subject to certain conditions to closing, including negotiation of customary credit documents in form and substance satisfactory to the lenders. Contango also announced that it has entered into a contribution and purchase agreement with Will Energy Corporation to acquire approximately 159,872 net acres located in North Louisiana and the Western Anadarko Basin in Western Oklahoma and the Texas Panhandle for aggregate consideration of $23 million, consisting of $20 million in cash and $3 million in common stock.