Business Context and Reporting Period
This Form 8-K was filed by Midstates Petroleum Company, Inc. on September 26, 2013. The report details the entry into a material definitive agreement regarding the company's credit facility. Note: The input metadata references "Amplify Energy Corp.", but the filing text explicitly identifies the registrant as Midstates Petroleum Company, Inc.
Key Financial Metrics and Credit Facility Terms
- Borrowing Base: Increased from $425 million to $500 million.
- Administrative Agent: SunTrust Bank, N.A.
- Debt Covenants (Net Indebtedness to EBITDA):
- 4.75:1.0 for quarters ending Sept 30, 2013 through March 31, 2014.
- 4.50:1.0 for the quarter ending June 30, 2014.
- 4.25:1.0 for quarters ending Sept 30, 2014 through Dec 31, 2014.
- 4.00:1.0 for the quarter ending March 31, 2015 and thereafter.
- Next Redetermination: Scheduled for April 1, 2014.
Material Changes
The primary material change is the Fourth Amendment to the Second Amended and Restated Credit Agreement. This amendment resulted in a $75 million increase in the borrowing base capacity. Additionally, the amendment established a stepped-down leverage ratio schedule, tightening the maximum allowable net indebtedness to EBITDA ratio over the subsequent 18 months.
Guidance, Outlook, and Risks
The filing does not provide specific revenue guidance, profit outlook, or management commentary beyond the terms of the credit amendment. The document notes that the description of the amendment is qualified by reference to the full text of the agreement filed as Exhibit 10.1. No specific risks or contingencies are detailed in the summary text of this 8-K.
Investor Verification Checklist
- Verify the full text of the Fourth Amendment (Exhibit 10.1) for additional covenants or conditions not summarized in the 8-K.
- Confirm the company's current leverage ratio against the new 4.75:1.0 threshold effective for the quarter ending September 30, 2013.
- Monitor the April 1, 2014, borrowing base redetermination date for potential changes in credit capacity.
- Clarify the discrepancy between the metadata company name (Amplify Energy Corp.) and the filing registrant (Midstates Petroleum Company, Inc.).