Attached files
| file | filename |
|---|---|
| EX-10.1 - EXHIBIT - Viper Energy Partners LP | ex10_1vipercreditagreement.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 8, 2014
Viper Energy Partners LP
(Exact Name of Registrant as Specified in Charter)
Delaware (State or other jurisdiction of incorporation) | 001-36505 (Commission File Number) | 46-5001985(I.R.S. Employer Identification Number) |
500 West Texas Suite 1200 Midland, Texas (Address of principal executive offices) | 79701 (Zip code) | |
(432) 221-7400 (Registrant’s telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) | ||
Check the appropriate box below if the Form 8-K 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 | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act | |
Item 1.01. Entry into a Material Definitive Agreement.
On July 8, 2014, Viper Energy Partners LP (“Viper”) entered into a Senior Secured Revolving Credit Agreement among Viper, as borrower, Wells Fargo Bank, National Association (“Wells Fargo”), as the administrative agent, sole book runner and lead arranger, and certain lenders from time to time party thereto (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility in the maximum amount of $500.0 million, subject to scheduled semi-annual and other elective collateral borrowing base redeterminations based on Viper’s oil and natural gas reserves and other factors (the “borrowing base”), and subject to the maximum credit amounts of the lenders thereunder. The borrowing base is scheduled to be redetermined semi-annually with effective dates of April 1st and October 1st. In addition, Viper may request up to three additional redeterminations of the borrowing base during any 12-month period. As of July 8, 2014, the borrowing base was set at $110.0 million and Wells Fargo was the only lender under the Credit Agreement, with a maximum credit amount of $55.0 million. Under the Credit Agreement, the commitment of the lenders is equal to the lesser of the aggregate maximum credit amounts of the lenders and the borrowing base.
The outstanding borrowings under the Credit Agreement bear interest at a rate elected by Viper that is based on the prime rate or LIBOR plus margins ranging from 0.50% for prime-based loans and 1.50% for LIBOR loans to 1.50% for prime-based loans and 2.50% for LIBOR loans, in each case depending on the amount of the loan outstanding in relation to the commitment. Viper is obligated to pay a quarterly commitment fee ranging from 0.375% to 0.50% per year on the unused portion of the commitment, which fee is also dependent on the amount of the loan outstanding in relation to the commitment. Loan principal may be optionally repaid from time to time without premium or penalty (other than customary LIBOR breakage), and is required to be paid (a) if the loan amount exceeds the borrowing base, whether due to a borrowing base redetermination or otherwise (in some cases subject to a cure period) and (b) at the maturity date of July 8, 2019. The loan is secured by substantially all of the assets of Viper and its subsidiaries.
The Credit Agreement contains various affirmative, negative and financial maintenance covenants. These covenants, among other things, limit additional indebtedness, additional liens, sales of assets, mergers and consolidations, dividends and distributions, transactions with affiliates and entering into certain swap agreements and require the maintenance of the financial ratios described below.
Financial Covenant | Required Ratio | ||
Ratio of total debt to EBITDAX | Not greater than 4.0 to 1.0 | ||
Ratio of current assets to liabilities, as defined in the Credit Agreement | Not less than 1.0 to 1.0 | ||
EBITDAX will be annualized beginning with the quarter ending September 30, 2014 and ending with the quarter ending March 31, 2015. The Credit Agreement may be used to provide working capital for lease acquisitions, exploration, production operations and development, to purchase equity interests issued by persons primarily engaged in the oil and gas business, subject to certain limitations, and for general corporate purposes.
The covenant prohibiting additional indebtedness allows for the issuance of unsecured debt of up to $250.0 million in the form of unsecured senior or senior subordinated notes and, in connection with any such issuance, the reduction of the borrowing base by 25% of the stated principal amount of each such issuance. A borrowing base reduction in connection with such issuance may require a portion of the outstanding principal of the loan to be repaid.
The lenders may accelerate all of the indebtedness under the Credit Agreement upon the occurrence and during the continuance of any event of default. The Credit Agreement contains customary events of default, including non-payment, breach of covenants, materially incorrect representations, cross-default, bankruptcy and change of control. There are no cure periods for events of default due to non-payment of principal and breaches of negative and financial covenants, but non-payment of interest and breaches of certain affirmative covenants are subject to customary cure periods.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under on Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 above is incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth in Item 1.01 above with respect to the Credit Agreement’s limitations on the payment of dividends and other distributions is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. | |
Number | Exhibit | |
10.1 | Senior Secured Revolving Credit Agreement, dated as of July 8, 2014, among Viper Energy Partners LP, as borrower, Wells Fargo Bank, National Association, as the administrative agent, sole book runner and lead arranger, and certain lenders from time to time party thereto. | |
SIGNATURE
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 thereunto duly authorized.
VIPER ENERGY PARTNERS LP | ||||
By: | Viper Energy Partners GP LLC, | |||
its general partner | ||||
Date: July 14, 2014 | By: | /s/ Randall J. Holder | ||
Randall J. Holder | ||||
Vice President, General Counsel and Secretary | ||||
Exhibit Index
Number | Exhibit | |
10.1 | Senior Secured Revolving Credit Agreement, dated as of July 8, 2014, among Viper Energy Partners LP, as borrower, Wells Fargo Bank, National Association, as the administrative agent, sole book runner and lead arranger, and certain lenders from time to time party thereto. | |