XML 93 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Long-Term Debt | 12 Months Ended
--- | ---
Dec. 31, 2011
Long-Term Debt [Abstract] |
Long-Term Debt | 8. Long-Term Debt Senior Secured Revolving Line of Credit — OP LLC, as parent, and OPNA, as borrower, entered into a credit agreement dated June 22, 2007 (as amended and restated, the "Amended Credit Facility"). The Amended Credit Facility is restricted to the borrowing base, which is reserve-based and subject to semi-annual redeterminations on April 1 and October 1 of each year. On October 6, 2011, the Company entered into its fifth amendment to its Amended Credit Facility. This amendment reduced the interest rates payable on the borrowings under the Amended Credit Facility, extended the maturity date of the Amended Credit Facility from February 26, 2015 to October 6, 2016, and increased the senior secured revolving line of credit from $600 million to $1 billion. In connection with this amendment, the semi-annual redetermination of the borrowing base was also completed on October 6, 2011, which resulted in the borrowing base of the Amended Credit Facility increasing from $137.5 million to $350 million. In addition, on October 25, 2011, the Company's lenders in the Amended Credit Facility waived the mandatory reduction of the Company's borrowing base that otherwise would have occurred as a result of the issuance of the senior unsecured notes subsequently offered (see "Senior Unsecured 2021 Notes" below). Borrowings under the Amended Credit Facility are collateralized by perfected first priority liens and security interests on substantially all of the Company's assets, including mortgage liens on oil and natural gas properties having at least 80% of the reserve value as determined by reserve reports. Borrowings under the Amended Credit Facility are subject to varying rates of interest based on (1) the total outstanding borrowings (including the value of all outstanding letters of credit) in relation to the borrowing base and (2) whether the loan is a London interbank offered rate ("LIBOR") loan or a domestic bank prime interest rate loan (defined in the Amended Credit Facility as an Alternate Based Rate or "ABR" loan). As of December 31, 2011, any outstanding LIBOR and ABR loans would have beared their respective interest rates plus the applicable margin indicated in the following table:
|  |  | September 30, |  |  |  | September 30, |
Ratio of Total Outstanding Borrowings to Borrowing Base |  | Applicable Margin for LIBOR Loans |  |  | Applicable Margin for ABR Loans |
Less than .25 to 1 |  |  | 1.50 | % |  |  | 0.00 | %
Greater than or equal to .25 to 1 but less than .50 to 1 |  |  | 1.75 | % |  |  | 0.25 | %
Greater than or equal to .50 to 1 but less than .75 to 1 |  |  | 2.00 | % |  |  | 0.50 | %
Greater than or equal to .75 to 1 but less than .90 to 1 |  |  | 2.25 | % |  |  | 0.75 | %
Greater than .90 to 1 but less than or equal 1 |  |  | 2.50 | % |  |  | 1.00 | %
An ABR loan may be repaid at any time before the scheduled maturity of the Amended Credit Facility upon the Company providing advance notification to the lenders under the Amended Credit Facility (the "Lenders"). Interest is paid quarterly on ABR loans based on the number of days an ABR loan is outstanding as of the last business day in March, June, September and December. The Company has the option to convert an ABR loan to a LIBOR-based loan upon providing advance notification to the Lenders. The minimum available loan term is one month and the maximum loan term is six months for LIBOR-based loans. Interest for LIBOR loans is paid upon maturity of the loan term. Interim interest is paid every three months for LIBOR loans that have loan terms greater than three months in duration. At the end of a LIBOR loan term, the Amended Credit Facility allows the Company to elect to repay the borrowing, continue a LIBOR loan with the same or a differing loan term or convert the borrowing to an ABR loan. On a quarterly basis, the Company also pays a 0.375% (as of December 31, 2011) annualized commitment fee on the average amount of borrowing base capacity not utilized during the quarter and fees calculated on the average amount of letter of credit balances outstanding during the quarter. The Amended Credit Facility contains covenants that include, among others:
| • |  | a prohibition against incurring debt, subject to permitted exceptions;
| • |  | a prohibition against making dividends, distributions and redemptions, subject to permitted exceptions;
| • |  | a prohibition against making investments, loans and advances, subject to permitted exceptions;
| • |  | restrictions on creating liens and leases on the assets of the Company and its subsidiaries, subject to permitted exceptions;
| • |  | restrictions on merging and selling assets outside the ordinary course of business;
| • |  | restrictions on use of proceeds, investments, transactions with affiliates or change of principal business;
| • |  | a provision limiting oil and natural gas derivative financial instruments;
| • |  | a requirement that the Company not allow a ratio of Total Net Debt (as defined in the Amended Credit Facility) to consolidated EBITDAX (as defined in the Amended Credit Facility) to be greater than 4.0 to 1.0 for the four quarters ended on the last day of each quarter; and
| • |  | a requirement that the Company maintain a Current Ratio (as defined in the Amended Credit Facility) of consolidated current assets (with exclusions as described in the Amended Credit Facility) to consolidated current liabilities (with exclusions as described in the Amended Credit Facility) of not less than 1.0 to 1.0 as of the last day of any fiscal quarter.
The Amended Credit Facility contains customary events of default. If an event of default occurs and is continuing, the Lenders may declare all amounts outstanding under the Amended Credit Facility to be immediately due and payable. As of December 31, 2011, the Company had no borrowings and no outstanding letters of credit issued under the Amended Credit Facility, resulting in an unused borrowing base capacity of $350 million. The Company was in compliance with the financial covenants of the Amended Credit Facility as of December 31, 2011. Senior Unsecured 2019 Notes — On February 2, 2011, the Company issued $400.0 million of 7.25% senior unsecured notes due February 1, 2019 (the "2019 Notes"). Interest on the 2019 Notes is payable semi-annually in arrears on each February 1 and August 1, commencing August 1, 2011. The 2019 Notes are guaranteed on a senior unsecured basis by the Company's material subsidiaries (the "Guarantors"). These guarantees are full and unconditional and joint and several among the Guarantors. The issuance of these 2019 Notes resulted in net proceeds to the Company of approximately $390.0 million. The 2019 Notes were issued under an indenture, dated as of February 2, 2011 (the "2019 Base Indenture"), among the Company and U.S. Bank National Association, as trustee (the "Trustee"), as amended and supplemented by the first supplemental indenture among the Company, the Guarantors and the Trustee, also dated as of February 2, 2011 (the "2019 First Supplemental Indenture") and as further amended and supplemented by the second supplemental indenture among the Company, the Guarantors and the Trustee (the "2019 Second Supplemental Indenture"; the 2019 Base Indenture, as amended and supplemented by the 2019 First Supplemental Indenture and the 2019 Second Supplemental Indenture, the "2019 Indenture"), dated as of September 19, 2011. On September 23, 2011, the Company filed a Registration Statement on Form S-4 (Registration No. 333-176974) with the Securities and Exchange Commission ("SEC") to allow the holders of the 2019 Notes to exchange the 2019 Notes for registered notes that have substantially identical terms as the 2019 Notes. This Registration Statement was effective on November 21, 2011. At any time prior to February 1, 2014, the Company has the option to redeem up to 35% of the 2019 Notes at a redemption price of 107.25% of the principal amount, plus accrued and unpaid interest to the redemption date, with the proceeds of certain equity offerings so long as the redemption occurs within 180 days of completing such equity offering and at least 65% of the aggregate principal amount of the 2019 Notes remains outstanding after such redemption. Prior to February 1, 2015, the Company has the option to redeem some or all of the 2019 Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. On and after February 1, 2015, the Company has the option to redeem some or all of the 2019 Notes at redemption prices (expressed as percentages of the principal amount) equal to 103.625% for the twelve-month period beginning on February 1, 2015, 101.813% for the twelve-month period beginning February 1, 2016 and 100% beginning on February 1, 2017, plus accrued and unpaid interest to the redemption date. The Company estimates that the fair value of this option is immaterial at December 31, 2011. The 2019 Indenture restricts the Company's ability and the ability of certain of its subsidiaries to: (i) incur additional debt or enter into sale and leaseback transactions; (ii) pay distributions on, redeem or repurchase equity interests; (iii) make certain investments; (iv) incur liens; (v) enter into transactions with affiliates; (vi) merge or consolidate with another company; and (vii) transfer and sell assets. These covenants are subject to certain exceptions and qualifications. If at any time when the 2019 Notes are rated investment grade by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Services and no Default (as defined in the 2019 Indenture) has occurred and is continuing, many of such covenants will terminate and the Company and its subsidiaries will cease to be subject to such covenants. The 2019 Indenture contains customary events of default, including:
| • |  | default in any payment of interest on any 2019 Note when due, continued for 30 days;
| • |  | default in the payment of principal or premium, if any, on any 2019 Note when due;
| • |  | failure by the Company to comply with its other obligations under the 2019 Indenture, in certain cases subject to notice and grace periods;
| • |  | payment defaults and accelerations with respect to other indebtedness of the Company and its Restricted Subsidiaries (as defined in the 2019 Indenture) in the aggregate principal amount of $10.0 million or more;
| • |  | certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (as defined in the 2019 Indenture) or group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;
| • |  | failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary to pay certain final judgments aggregating in excess of $10.0 million within 60 days; and
| • |  | any guarantee of the 2019 Notes by a Guarantor ceases to be in full force and effect, is declared null and void in a judicial proceeding or is denied or disaffirmed by its maker.
Senior Unsecured 2021 Notes — On November 10, 2011, the Company issued $400.0 million of 6.5% senior unsecured notes due November 1, 2021 (the "2021 Notes"). Interest is payable on the 2021 Notes semi-annually in arrears on each May 1 and November 1, commencing May 1, 2012. The 2021 Notes are guaranteed on a senior unsecured basis by the Guarantors. These guarantees are full and unconditional and joint and several among the Guarantors. The issuance of these 2021 Notes resulted in net proceeds to the Company of $393.4 million. The 2021 Notes were issued under an indenture, dated as of November 10, 2011 (the "2021 Base Indenture"), among the Company and the Trustee, as amended and supplemented by a supplemental indenture among the Company, the Guarantors and the Trustee, also dated as of November 10, 2011 (the "2021 Supplemental Indenture"; the 2021 Base Indenture, as amended and supplemented by the 2021 Supplemental Indenture, the "2021 Indenture"). At any time prior to November 1, 2014, the Company has the option to redeem up to 35% of the 2021 Notes at a redemption price of 106.5% of the principal amount, plus accrued and unpaid interest to the redemption date, with the proceeds of certain equity offerings so long as the redemption occurs within 180 days of completing such equity offering and at least 65% of the aggregate principal amount of the 2021 Notes remains outstanding after such redemption. Prior to November 1, 2016, the Company has the option to redeem some or all of the 2021 Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. On and after November 1, 2016, the Company has the option to redeem some or all of the 2021 Notes at redemption prices (expressed as percentages of the principal amount) equal to 103.25% for the twelve-month period beginning on November 1, 2016, 102.167% for the twelve-month period beginning November 1, 2017, 101.083% for the twelve-month period beginning on November 1, 2018 and 100% beginning on November 1, 2019, plus accrued and unpaid interest to the redemption date. The Company estimates that the fair value of this option is immaterial at December 31, 2011. If a change in control occurs at any time on or prior to January 13, 2013, the Company has the option to redeem all, but not less than all, of the 2021 Notes, at a redemption price equal to 110% of the principal amount plus accrued and unpaid interest to the redemption date. The issuance and sale of the 2021 Notes has been registered under the Securities Act of 1933 pursuant to the Company's automatic shelf Registration Statement on Form S-3 (Registration No. 333-175603), as amended, filed with the SEC on July 15, 2011. Closing of the issuance and sale of the 2021 Notes occurred on November 10, 2011. On October 27, 2011, in connection with the issuance of these 2021 Notes, the Company entered into an underwriting agreement (the "Underwriting Agreement") with J.P. Morgan Securities LLC. The Underwriting Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing, obligations of the parties and termination provisions. Additionally, the Company has agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities. Furthermore, the Company has agreed with the underwriters not to offer or sell any debt securities issued or guaranteed by the Company having a term of more than one year (other than the 2021 Notes) for a period of 60 days after the date of the Underwriting Agreement without prior written consent of J.P. Morgan Securities LLC. The Indenture restricts the Company's ability and the ability of certain of its subsidiaries to: (i) incur additional debt or enter into sale and leaseback transactions; (ii) pay distributions on, redeem or repurchase equity interests; (iii) make certain investments; (iv) incur liens; (v) enter into transactions with affiliates; (vi) merge or consolidate with another company; and (vii) transfer and sell assets. These covenants are subject to certain exceptions and qualifications. If at any time when the 2021 Notes are rated investment grade by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Services and no Default (as defined in the 2021 Indenture) has occurred and is continuing, many of such covenants will terminate and the Company and its subsidiaries will cease to be subject to such covenants. The 2021 Indenture contains customary events of default, including:
| • |  | default in any payment of interest on any 2021 Note when due, continued for 30 days;
| • |  | default in the payment of principal or premium, if any, on any 2021 Note when due;
| • |  | failure by the Company to comply with its other obligations under the 2021 Indenture, in certain cases subject to notice and grace periods;
| • |  | payment defaults and accelerations with respect to other indebtedness of the Company and its Restricted Subsidiaries (as defined in the 2021 Indenture) in the aggregate principal amount of $10.0 million or more;
| • |  | certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (as defined in the 2021 Indenture) or group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;
| • |  | failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary to pay certain final judgments aggregating in excess of $10.0 million within 60 days; and
| • |  | any guarantee of the 2021 Notes by a Guarantor ceases to be in full force and effect, is declared null and void in a judicial proceeding or is denied or disaffirmed by its maker.
Deferred Financing Cost s — As of December 31, 2011, the Company had $2.8 million, $8.6 million and $7.1 million of deferred financing costs related to the Amended Credit Facility, the 2019 Notes and the 2021 Notes, respectively. The deferred financing costs are included in Deferred costs and other assets on the Company's Consolidated Balance Sheet at December 31, 2011 and are being amortized over the respective terms of the Amended Credit Facility, the 2019 Notes and the 2021 Notes. The amortization of these deferred financing costs is included in Interest expense on the Company's Consolidated Statement of Operations.

X
- Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 Reference 2: 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 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration