Business Context and Reporting Period
This Form 8-K was filed by Halcón Resources Corporation (not Battalion Oil Corp) on November 7, 2018. The report details the entry into a material definitive agreement regarding the company's senior secured revolving credit facility.
Key Financial Metrics and Agreement Terms
The filing does not report specific revenue, profit, or cash flow figures. Instead, it outlines amendments to financial covenants within the Credit Agreement:
- EBITDA Calculation: The amendment permits the use of annualized or partially annualized financial information to determine EBITDA for fiscal quarters ending September 30, 2018, through September 30, 2019.
- Debt-to-EBITDA Ratio Limits: The maximum allowable ratio of Consolidated Total Net Debt to EBITDA was adjusted as follows:
- 4.75 to 1.0 for the quarter ending September 30, 2018.
- 4.25 to 1.0 for the quarter ending December 31, 2018.
- 4.0 to 1.0 for any fiscal quarter thereafter.
Material Changes
The primary material change is the execution of the Fifth Amendment to the Amended and Restated Senior Secured Revolving Credit Agreement. This amendment relaxes the debt leverage covenant thresholds for the specified periods and modifies the methodology for calculating EBITDA used in compliance testing.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or specific risk factors beyond the terms of the credit agreement amendment. The document notes that the description of the amendment is qualified in its entirety by the full text of the agreement filed as Exhibit 10.1.
Investor Verification Checklist
- Verify the company name is Halcón Resources Corporation, as the input metadata incorrectly listed "Battalion Oil Corp."
- Review Exhibit 10.1 (Fifth Amendment) for the complete legal terms and conditions of the credit facility.
- Confirm the company's current compliance with the new 4.75 to 1.0 debt-to-EBITDA ratio for the quarter ended September 30, 2018.
- Monitor future filings to ensure the company adheres to the stepped-down leverage ratios (4.25 and 4.0) in subsequent quarters.