SEC Filing Summary: RAM Energy Resources, Inc.
Business Context and Reporting Period
This Form 8-K was filed by RAM Energy Resources, Inc. (not Battalion Oil Corp) on December 8, 2010, reporting events occurring on December 3, 2010. The filing concerns a material amendment to the company's existing credit facility.
Key Financial Metrics
The filing does not provide specific financial metrics such as revenue, profit, cash flow, margins, or total debt levels. The document focuses exclusively on the terms of a loan agreement amendment.
Material Changes
On December 3, 2010, RAM Energy Resources, Inc. entered into a Third Amendment to its Loan Agreement dated November 29, 2007. The amendment modifies Section 7.4 of the agreement to permit the company to sell assets exceeding $10,000,000, subject to the following conditions:
- Approval must be obtained from "Required Lenders," defined as revolver lenders representing at least 66 2/3% of the aggregate revolver commitment and term loan lenders representing at least 50.1% of the term loan commitment.
- Net proceeds from such asset sales must be immediately paid to the Administrative Agent to reduce outstanding obligations under the Loan Agreement, as approved by the Required Lenders.
Guidance, Outlook, and Risks
The filing contains no management commentary, forward-looking guidance, or discussion of general business risks. The primary contingency noted is the requirement for lender approval prior to executing large asset sales and the mandatory application of proceeds to debt repayment.
Investor Verification Checklist
- Verify the total outstanding principal balance under the Loan Agreement to assess the impact of mandatory debt paydowns from future asset sales.
- Confirm the current composition of the lender group to determine if the "Required Lenders" threshold (66 2/3% revolver, 50.1% term) is easily achievable.
- Review the company's asset portfolio to identify potential assets exceeding the $10,000,000 threshold that may be subject to these new restrictions.
- Check subsequent filings for any asset sales executed under this amendment and the resulting reduction in debt.