Business Context and Reporting Period
Company: ProPetro Holding Corp.
Filing Type: Form 8-K (Current Report)
Date of Report: June 22, 2020
Event: Entry into a Material Definitive Agreement (Waiver to Credit Agreement).
Key Financial Metrics
This filing does not report revenue, profit, cash flow, or margins. It details specific conditions related to the company's credit facility:
- Letters of Credit Limit: No more than $4.0 million in aggregate face amount outstanding.
- Borrowings: No Borrowings outstanding.
- Availability Requirement: At least $8.0 million.
- Cash Dominion Period Trigger: Availability less than the greater of 10.0% of Maximum Credit or $22,500,000 for five consecutive Business Days.
Material Changes
On June 22, 2020, the Company and ProPetro Services, Inc. entered into a Waiver with lenders regarding the Credit Agreement dated March 22, 2017. The Waiver modifies requirements during a "Cash Dominion Period," specifically waiving:
- Mandatory prepayment requirements.
- Certain cash management obligations.
- Weekly Borrowing Base reporting requirements.
- Cash collateralization requirements for letters of credit.
The Waiver is effective from June 20, 2020, through June 19, 2021, provided the conditions listed above are met. The Borrower has a 30-day cure period for any breach of these conditions.
Guidance, Outlook, and Risks
Management Commentary: The filing focuses solely on the execution of the Waiver to maintain flexibility under the Credit Agreement during periods of low availability.
Risks and Contingencies: The Waiver is conditional. If the Borrower fails to maintain the required Availability ($8.0 million), limit Letters of Credit ($4.0 million), or incurs Borrowings, the Waiver conditions are breached. A Default or Event of Default would also terminate the Waiver's protections.
Investor Verification Checklist
- Verify current Availability under the Credit Agreement to ensure it remains above the $8.0 million threshold.
- Confirm the aggregate face amount of outstanding letters of credit does not exceed $4.0 million.
- Check for any new Borrowings that would violate the Waiver conditions.
- Review the full text of the Waiver (Exhibit 10.1) for additional covenants not summarized in the 8-K.