Petroflow Energy gets $353 million of first-, second-lien facilities

By Angela McDaniels

Tacoma, Wash., Aug. 5 – Petroflow Energy Corp. and Texoak Energy-Project 1C, LLC entered into a $250 million first-lien credit agreement due July 31, 2017 and a $103 million second-lien credit agreement due Jan. 31, 2018, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate is Libor plus 800 basis points with a 1% Libor floor for the first-lien credit agreement and 12% for the second-lien credit agreement. Each credit agreement provides for an additional 3% of interest per year for interest that is paid in kind.

There is no scheduled amortization during the term of either credit agreement.

Loans outstanding under the credit agreements may be voluntarily prepaid subject to any applicable premium and, in the case of the second-lien credit agreement, some limitations.

The credit agreements contain customary mandatory prepayments, including as a result of asset sales and an annual free cash flow sweep.

All domestic subsidiaries of Petroflow are required to guarantee the credit agreements, and substantially all of the borrowers’ and the guarantors’ assets are pledged as security on a first- or second-lien basis, as applicable.

The companies entered into the credit agreements on July 31 in connection with Petroflow’s acquisition of Equal Energy Ltd.

Equal Energy’s C$105 million revolving credit facility and C$20 million operating credit facility were canceled.

Petroflow and Equal Energy are oil and gas exploration and production companies based in Tulsa, Okla., and Oklahoma City, respectively.

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