Black Elk Energy plans to amend revolver to increase borrowing base

By Angela McDaniels

Tacoma, Wash., May 16 - Black Elk Energy Offshore Operations, LLC plans to amend its $110 million credit facility due 2013 to, among other things, increase the borrowing base under the revolver, according to an S-4 filing with the Securities and Exchange Commission.

The facility includes a $35 million senior secured revolver and a $75 million secured letter-of-credit facility.

The company plans to acquire properties in the Gulf of Mexico that include estimated proved reserves valued at $361.6 million. The borrowing base will be increased based on the new reserves.

Black Elk will pay $40 million for the properties and assume about $175 million of undiscounted asset retirement obligations related to plugging and abandonment obligations associated with them.

The company gave the sellers an earnest money deposit of $4 million and will finance the remainder of the purchase price with existing available cash, equity financing from majority equity holder Platinum Partners Value Arbitrage Fund LP and $35 million of borrowings under the revolver.

Black Elk Energy is a Houston-based oil and gas company.

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