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Debt and Credit Agreements | 12 Months Ended
--- | ---
Dec. 31, 2012
Debt and Credit Agreements |
Debt and Credit Agreements | 4. Debt and Credit Agreements The Company's debt consisted of the following:
|  | December 31, |
--- | --- | --- | ---
(In thousands) |  | 2012 |  | 2011 |
Long-Term Debt |  |  |  |  |  |  |
7.33% weighted-average fixed rate notes |  | $ | 95,000 |  | $ | 95,000 |
6.51% weighted-average fixed rate notes |  |  | 425,000 |  |  | 425,000 |
9.78% notes |  |  | 67,000 |  |  | 67,000 |
5.58% weighted-average fixed rate notes |  |  | 175,000 |  |  | 175,000 |
Credit facility |  |  | 325,000 |  |  | 188,000 |
Current Maturities |  |  |  |  |  |  |
7.33% weighted-average fixed rate notes |  |  | (75,000 | ) |  | — |
Long-Term Debt, excluding Current Maturities |  | $ | 1,012,000 |  | $ | 950,000 |
The Company has debt maturities of $75.0 million due in 2013, $20.0 million in 2016 and $245.0 million due in 2018. In addition, the revolving credit facility (credit facility) matures in 2017. No other tranches of debt are due within the next five years. At December 31, 2012, the Company was in compliance with all restrictive financial covenants in both the revolving credit agreement and senior notes. 7.33% Weighted-Average Fixed Rate Notes In July 2001, the Company issued $170 million of Notes to a group of seven institutional investors in a private placement. The Notes have bullet maturities and were issued in three separate tranches as follows:
|  | Principal |  | Term |  | Maturity Date |  | Coupon
--- | --- | --- | --- | --- | --- | --- | --- | ---
Tranche 1 |  | $ | 75,000,000 |  | 10-year |  |  | July 2011 |  | 7.26%
Tranche 2 |  | $ | 75,000,000 |  | 12-year |  |  | July 2013 |  | 7.36%
Tranche 3 |  | $ | 20,000,000 |  | 15-year |  |  | July 2016 |  | 7.46%
Interest on each series of the 7.33% weighted-average fixed rate notes is payable semi-annually. The Company may prepay all or any portion of the Notes of each series on any date at a price equal to the principal amount thereof plus accrued and unpaid interest plus a make-whole premium. The Notes contain restrictions on the merger of the Company or any subsidiary with a third party other than under certain limited conditions. There are also various other restrictive covenants customarily found in such debt instruments. Those covenants include a required asset coverage ratio (present value of proved reserves to debt and other liabilities) of at least 1.75 to 1.0 (as amended) and a minimum annual coverage ratio of operating cash flow to interest expense for the trailing four quarters of 2.8 to 1.0. In December 2010, the Company repaid Tranche 1 prior to the due date. In connection with the early payment the Company was required to pay a make-whole premium of $2.8 million which was included in Interest expense and other in the Consolidated Statement of Operations. 6.51% Weighted-Average Fixed Rate Notes In July 2008, the Company issued $425 million of senior unsecured fixed-rate notes to a group of 41 institutional investors in a private placement. The Notes have bullet maturities and were issued in three separate tranches as follows:
|  | Principal |  | Term |  | Maturity Date |  | Coupon
--- | --- | --- | --- | --- | --- | --- | --- | ---
Tranche 1 |  | $ | 245,000,000 |  | 10-year |  |  | July 2018 |  | 6.44%
Tranche 2 |  | $ | 100,000,000 |  | 12-year |  |  | July 2020 |  | 6.54%
Tranche 3 |  | $ | 80,000,000 |  | 15-year |  |  | July 2023 |  | 6.69%
Interest on each series of the 6.51% weighted-average fixed rate notes is payable semi-annually. The Company may prepay all or any portion of the Notes of each series on any date at a price equal to the principal amount thereof plus accrued and unpaid interest plus a make-whole premium. The Notes contain restrictions on the merger of the Company with a third party other than under certain limited conditions. There are also various other restrictive covenants customarily found in such debt instruments. These covenants include a required asset coverage ratio (present value of proved reserves plus adjusted cash (as defined in the note purchase agreement) to debt and other liabilities) of at least 1.75 to 1.0 (as amended) and a minimum annual coverage ratio of operating cash flow to interest expense for the trailing four quarters of 2.8 to 1.0. The Notes are also subject to customary events of default. The Company is required to offer to prepay the Notes upon specified change in control events accompanied by a ratings decline below investment grade. 9.78% Notes In December 2008, the Company issued $67 million aggregate principal amount of its 10-year 9.78% Series G Senior Notes to a group of four institutional investors in a private placement. Interest on the Notes is payable semi-annually. The Company may prepay all or any portion of the Notes on any date at a price equal to the principal amount thereof plus accrued and unpaid interest plus a make-whole premium. The other terms of the Notes are substantially similar to the terms of the 6.51% Weighted-Average Fixed Rate Notes. 5.58% Weighted-Average Fixed Rate Notes In December 2010, the Company issued $175 million of senior unsecured fixed-rate notes to a group of eight institutional investors in a private placement. The Notes have bullet maturities and were issued in three separate tranches as follows:
|  | Principal |  | Term |  | Maturity Date |  | Coupon
--- | --- | --- | --- | --- | --- | --- | --- | ---
Tranche 1 |  | $ | 88,000,000 |  | 10-year |  | January 2021 |  | 5.42%
Tranche 2 |  | $ | 25,000,000 |  | 12-year |  | January 2023 |  | 5.59%
Tranche 3 |  | $ | 62,000,000 |  | 15-year |  | January 2026 |  | 5.80%
Interest on each series of the 5.58% weighted-average fixed rate notes is payable semi-annually. The Company may prepay all or any portion of the Notes of each series on any date at a price equal to the principal amount thereof plus accrued and unpaid interest plus a make-whole premium. The other terms of the Notes are substantially similar to the terms of the 6.51% Weighted-Average Fixed Rate Notes. Revolving Credit Agreement In September 2010, the Company amended and restated its revolving credit facility. The Company subsequently amended the revolving credit facility in May 2012 to adjust the margins associated with borrowings under the facility and extended the maturity date from September 2015 to May 2017. The credit facility, as amended, provides for an available credit line of $900 million with an accordion feature, which allows the Company to increase the available credit line by an additional $500 million if one or more of the existing or new banks agree to provide such increased amount. The other terms and conditions of the amended facility are generally consistent with the terms and conditions of the September 2010 credit agreement prior to its amendment. In conjunction with entering into the May 2012 amendment, the Company incurred $5.0 million of debt issuance costs, which were capitalized and will be amortized over the term of the amended credit facility. Approximately $1.3 million of unamortized cost associated with the original credit facility was recognized as a debt extinguishment cost, which was included in Interest expense and other in the Consolidated Statement of Operations, and the remaining unamortized costs of $11.0 million will be amortized over the term of the amended credit facility. The amended credit facility is unsecured. The available credit line is subject to adjustment from time to time on the basis of (1) the projected present value (as determined by the banks based on the Company's reserve reports and engineering reports) of estimated future net cash flows from certain proved oil and gas reserves and certain other assets of the Company (the "Borrowing Base") and (2) the outstanding principal balance of the Company's senior notes. While the Company does not expect a reduction in the available credit line, in the event that it is adjusted below the outstanding level of borrowings in connection with scheduled redetermination or due to a termination of hedge positions, the Company has a period of six months to reduce its outstanding debt in equal monthly installments to the adjusted credit line available. The Borrowing Base is redetermined annually under the terms of the credit facility on April 1. In addition, either the Company or the banks may request an interim redetermination twice a year in connection with certain acquisitions or sales of oil and gas properties. As of December 31, 2012, the Company's borrowing base was $1.7 billion. Interest rates under the amended credit facility are based on Euro-Dollars (LIBOR) or Base Rate (Prime) indications, plus a margin. The associated margins increase if the total indebtedness under the credit facility and the Company's senior notes as a percentage of the Borrowing Base is greater than the percentages shown below:
|  | Debt Percentage
--- | --- | ---
|  | <25% |  | ³25% <50% |  | ³50% <75% |  | ³75% <90% |  | ³90%
Eurodollar loans |  | 1.50% |  | 1.75% |  | 2.00% |  | 2.25% |  | 2.50%
ABR loans |  | 0.50% |  | 0.75% |  | 1.00% |  | 1.25% |  | 1.50%
The amended credit facility provides for a commitment fee on the unused available balance at annual rates ranging from 0.375% to 0.50%. The amended credit facility also contains various customary restrictions, which include the following (with all calculations based on definitions contained in the agreement): (a) Maintenance of a minimum annual coverage ratio of operating cash flow to interest expense for the trailing four quarters of 2.8 to 1.0. (b) Maintenance of an asset coverage ratio of the present value of proved reserves plus working capital to debt of 1.75 to 1.0. (c) Maintenance of a current ratio of 1.0 to 1.0. (d) Prohibition on the merger or sale of all or substantially all of the Company's or any subsidiary's assets to a third party, except under certain limited conditions. In addition, the amended credit facility includes a customary condition to the Company's borrowings under the facility that a material adverse change has not occurred with respect to the Company. At December 31, 2012 and 2011, borrowings outstanding under the Company's credit facility were $325.0 million and $188.0 million, respectively. Availability under the credit facility at December 31, 2012 was $574.0 million. The Company's weighted-average effective interest rates for the credit facility during the years ended December 31, 2012, 2011 and 2010 were approximately 3.0%, 4.1% and 3.8%, respectively. As of December 31, 2012 and 2011, the weighted-average interest rate on the Company's credit facility was approximately 2.2% and 4.9%, respectively.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 + Details
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