Clayton Williams Energy enters into $350 million credit agreement

By Tali Rackner

Norfolk, Va., March 8 – Clayton Williams Energy, Inc. said it entered into a $350 million credit agreement with certain funds managed by Ares Management, LP providing for the lenders to make secured term loans to the company, according to a Tuesday press release.

Clayton Williams also agreed to issue to the lenders warrants to purchase 2.25 million shares of the company’s common stock at a price of $22 per share with rights to appoint two members to the company’s board of directors.

Proceeds will be used to fully repay the outstanding debt under the company’s revolving credit facility and provide additional liquidity to fund the company’s operations and future development. Closing is expected to occur on or before March 31.

Concurrently, Clayton Williams announced an amendment to its bank revolving credit facility to reduce lender commitments to $100 million and ease financial covenants, among other changes. The amendment will be effective upon closing of the secured term loan transaction.

Goldman Sachs & Co. served as lead arranger and bookrunner, and Stephens Inc. advised the lenders.

Clayton Williams is an independent energy company located in Midland, Texas.

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