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EX-10.4 - EXHIBIT 10.4 - RIDGEWOOD ENERGY V FUND LLCex10_4.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event Reported): June 1, 2018
 
RIDGEWOOD ENERGY V FUND, LLC
(Exact Name of Registrant as Specified in its Charter)
Delaware
 
000-53178
 
20-5941122
(State or Other Jurisdiction of
Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
14 Philips Parkway, Montvale, New Jersey, 07645
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code: (800) 942-5550
 
Not Applicable
(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 (see General Instruction A.2. below):
 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised finial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 

 

 
Item 1.01 Entry into a Material Definitive Agreement

On June 1, 2018, Ridgewood Energy V Fund, LLC, a Delaware limited liability company (the “Fund”), Rahr Energy Investments LLC, as administrative agent and lender (and any other lender that may become a party thereto, collectively “Lenders”) entered into a third amendment (the “Third Amendment”), effective as of September 1, 2018 (“Third Amendment Effective Date”), to that certain credit agreement, dated as of November 27, 2012 (as amended by the first amendment to credit agreement, dated September 30, 2016, and the second amendment to credit agreement and reaffirmation of waiver, dated September 15, 2017, the “Existing Credit Agreement”, and as amended by the Third Amendment, the “Credit Agreement”).  In addition to the Fund’s execution of the Third Amendment, Ridgewood Energy O Fund, LLC, Ridgewood Energy Q Fund, LLC, Ridgewood Energy S Fund, LLC, Ridgewood Energy T Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy A-1 Fund, LLC and Ridgewood Energy B-1 Fund, LLC (each a “Borrower” and collectively, the “Borrowers”) have also executed the Third Amendment. Pursuant to the Credit Agreement, each Borrower has a separate loan commitment from the Lenders and amounts borrowed are not joint and several obligations. Each of the Borrowers’ borrowings is secured solely by its separate interest in the Beta Project. Therefore, the Fund is liable for the repayment of its loan and is not liable to the Lenders to repay any loan made to any other Borrower. The funds available under the Existing Credit Agreement were used by the Fund to pay its working interest ownership share of the drilling, development and completion costs associated with the Beta Project.

The Third Amendment eliminates fixed monthly payments of principal and interest, as defined in the Existing Credit Agreement, and instead requires a monthly payment amount based on a fixed percentage of the Fund’s net revenue derived from the Beta Project. The fixed percentage and interest rate shall be determined based on the Fund’s ratio of outstanding debt to working interest ownership in the Beta Project. The fixed percentage with respect to each Borrower means (a) beginning on the Third Amendment Effective Date up to and including March 31, 2019, the percentage set forth on Schedule 1.01(i) of the Credit Agreement and (b) beginning on April 1, 2019 and each April 1st thereafter, the greater of (i) the percentage set forth on Schedule 1.01(i) as of the Third Amendment Effective Date or (ii) the Fixed Reassessment Percentage, as defined in the Credit Agreement. The Fixed Reassessment Percentage is determined annually, beginning on April 1, 2019 and each April 1st thereafter, and shall be based on the Fund’s ratio of its outstanding debt as of the reassessment date relative to 80% of  third-party reserve engineers’ proved plus probable future undiscounted cash flows attributable to the Beta Project through the maturity of the loan.  The loan shall bear an interest at a rate equal to the percentages set forth on Schedule 3.02 of the Credit Agreement.

In addition, the Third Amendment extends the loan maturity date from December 31, 2020 to December 31, 2022. Finally, the Third Amendment eliminates the concept of the three-tiered overriding royalty interest (ORRI) percentages based on production milestones.  The Third Amendment fixes the Fund’s ORRI assigned to the Lenders at 11.81%, the second tier percentage level set forth in the Existing Credit Agreement.
 
The foregoing descriptions are qualified in their entirety by reference to the Third Amendment and the Credit Agreement attached thereto as Exhibit A, a copy of which is filed as an exhibit to this Current Report on Form 8-K and is incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information provided in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
 
Item 9.01 Financial Statements and Exhibits
   
(d)
Exhibits
   
Exhibit
Number
 
Description
     
10.4
 
 

 
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 hereunto duly authorized.
 
 
       
RIDGEWOOD ENERGY V FUND, LLC
       
DATE: June 7, 2018
     
By:
 
/s/ Kathleen P. McSherry
           
Kathleen P. McSherry
Executive Vice President and Chief Financial Officer


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