Business Context and Reporting Period
This Form 8-K Current Report was filed by Midstates Petroleum Company, Inc. (not Amplify Energy Corp.) on October 20, 2015, covering events occurring on October 14, 2015. The filing details the entry into a material definitive agreement regarding the company's credit facilities.
Key Financial Metrics
- Borrowing Base: Ratified and maintained at $252,024,575.
- Conditional Borrowing Base Reduction: A reduction of $27,024,575 is confirmed if specific oil and gas properties are sold prior to the next redetermination.
- Liquidity Threshold: The conditional reduction applies only if the sum of available credit commitments plus cash and cash equivalents is not less than $425,000,000 immediately after the sale proceeds are applied.
- Administrative Agent: SunTrust Bank, N.A.
Material Changes
The company entered into a Ninth Amendment to its Second Amended and Restated Credit Agreement. Key changes include:
- Maintenance of the current borrowing base level.
- Establishment of a mechanism to reduce the borrowing base by approximately $27 million upon the sale of identified assets, contingent on maintaining a $425 million liquidity floor.
- Amendment of the threshold amount requiring advance notice to the Administrative Agent for asset sales occurring between borrowing base redeterminations.
Guidance, Outlook, and Risks
The filing references a press release dated October 20, 2015, which provided an operational update alongside the announcement of the Ninth Amendment. The filing does not contain specific forward-looking financial guidance, revenue projections, or detailed risk factors beyond the conditions of the credit agreement amendment. The primary contingency noted is the potential reduction in borrowing capacity tied to asset sales and liquidity levels.
Investor Verification Checklist
- Verify the specific oil and gas properties identified for potential sale that would trigger the $27,024,575 borrowing base reduction.
- Confirm the company's current cash and cash equivalents to assess the $425,000,000 liquidity threshold.
- Review the full text of the Ninth Amendment (Exhibit 10.1) for details on the amended notice thresholds for asset dispositions.
- Examine the October 20, 2015 press release (Exhibit 99.1) for the operational update referenced in Item 7.01.