Attached files
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EX-10.1 - EX-10.1 - GASCO ENERGY INC | d70958exv10w1.htm |
EX-99.1 - EX-99.1 - GASCO ENERGY INC | d70958exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
February 1, 2010
February 1, 2010
GASCO ENERGY, INC.
(Exact name of registrant as specified in its charter)
Nevada | 001-32369 | 98-0204105 | ||
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | ||
incorporation or organization) | Identification No.) |
8 Inverness Drive East, Suite 100
Englewood, Colorado 80112
(Address of principal executive office)
Englewood, Colorado 80112
(Address of principal executive office)
(Registrants telephone number, including area code): (303) 483-0044
N/A
(Former name or former address, if changed since last report.)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On February 1, 2010, Gasco Energy, Inc. (the Company) and certain of its subsidiaries as
guarantors (the Guarantors), the lenders party thereto (the Lenders) and JPMorgan Chase Bank,
N.A., as administrative agent (the Administrative Agent), entered into the Ninth Amendment to
Credit Agreement (the Ninth Amendment) amending that certain Credit Agreement, dated as of March
29, 2006, by and among the Company, the Guarantors, the Lenders and the Administrative Agent (as
amended, and as further amended by this Ninth Amendment, the Credit Agreement). Pursuant to the
Ninth Amendment, the Credit Agreement was amended, among other things, (i) to remove the scheduled
redetermination of the Companys borrowing base on or about January 30, 2010 with the effect that
scheduled redeterminations for the year ended December 31, 2010 revert to the regular
redetermination schedule of every six months on or about May 1 and November 1 of each year and (ii)
to reduce the Companys borrowing base to $16 million from $35 million in connection with the
previously announced sale of the Companys gas gathering system and evaporative facilities and the
sale of its interest in certain oil and gas properties (collectively, the Assets). The borrowing
base will be reduced by a fixed amount upon the consummation of each sale.
Notwithstanding the foregoing, effective as of April 1, 2010 the Companys borrowing base will be
automatically reduced to $16 million, regardless of whether any of the Assets are sold.
The Ninth Amendment also increased the interest rate pricing grid by 25 basis points for
Eurodollar based loans and for ABR priced loans effective February as of 1, 2010. Interest on
borrowings under the Credit Agreement accrues at variable interest rates at either a Eurodollar
rate or an alternate base rate. The Eurodollar rate is calculated as LIBOR plus an applicable
margin that, as amended, varies from 2.75% (for periods in which the Company has utilized less than
50% of the borrowing base) to 3.75% (for periods in which the Company has utilized at least 90% of
the borrowing base). The alternate base rate, as amended, is equal to the sum of (i) the greater of
(a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.50% and (c) the Adjusted LIBO Rate
for a one month interest period on such day plus 1.00% and (ii) an applicable margin that varies
from 1.75% (for periods in which the Company has utilized less than 50% of the borrowing base) to
2.75% (for periods in which the Company has utilized at least 90% of the borrowing base). The
Ninth Amendment further provides that if the borrowing base is greater than $16,000,000 on March 1,
2010, then effective on and after such date the interest rate pricing grid will automatically
increase an additional by 25 basis points for Eurodollar based loans and for ABR priced loans. The
Company elects the basis of the interest rate at the time of each borrowing under the Credit
Agreement. However, under certain circumstances, the Lenders may require the Company to use the
non-elected basis in the event that the elected basis does not adequately and fairly reflect the
cost of making such loans.
Additionally, the Ninth Amendment provides for the release of certain liens relating to the
Assets that secure the Companys obligations under the Credit Agreement. The Company is obligated
to use a portion of the cash proceeds from the sale of the Assets to repay outstanding borrowings
under the Credit Agreement in the amount that the borrowing base will be reduced upon the
consummation of each sale. The Ninth Amendment also provides that the Companys failure to sell
such Assets prior to April 1, 2010 for a fixed minimum cash proceeds amount will constitute an
Event of Default under the Credit Agreement. Should the Company default under the Credit
Agreement, the Lenders will have the right to terminate their aggregate commitment under the Credit
Agreement and declare outstanding borrowings immediately due and payable in
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whole. Additionally, an acceleration of the outstanding indebtedness under the Credit
Agreement in this manner would constitute an event of default under the indenture (the Indenture)
governing to the Companys outstanding 5.50% Convertible Senior Notes due 2011 issued on October
20, 2004 (the Convertible Notes). Should an event of default occur and continue under the
Indenture, the Convertible Notes may be declared immediately due and payable at their principal
amount together with accrued interest and liquidated damages, if any.
The foregoing description of the Ninth Amendment does not purport to be complete and is
qualified in its entirety by reference to the complete text of such agreement, a copy of which is
filed as Exhibits 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
On February 2, 2010, the Company issued a press release announcing the Ninth Amendment to
Credit Agreement, as set forth in Item 1.01 above. A copy of the press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information presented herein under
this Item 7.01 and set forth in the attached Exhibit 99.1 is deemed to be furnished and shall not
be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall such information and Exhibit be
deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, each as amended.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits:
10.1 | Ninth Amendment to the Credit Agreement, dated as of February 1, 2010, by and among Gasco Energy, Inc., as Borrower, certain subsidiaries of Gasco Energy, Inc., as Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. | ||
99.1 | Press Release dated February 2, 2010 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
Gasco Energy, Inc. |
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Date: February 5, 2010 | By: | /s/ W. King Grant | ||
Name: | W. King Grant | |||
Title: | Executive Vice President and Chief Financial Officer |
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EXHIBIT INDEX
Exhibit | ||
Number | Exhibit Description | |
10.1
|
Ninth Amendment to the Credit Agreement, dated as of February 1, 2010, by and among by and among Gasco Energy, Inc., as Borrower, certain subsidiaries of Gasco Energy, Inc., as Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. | |
99.1
|
Press Release dated February 2, 2010 |
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