7. 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 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 March 31, 2012, any outstanding LIBOR and ABR loans would have borne their respective interest rates plus the applicable margin indicated in the following table:


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% 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:

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a prohibition against incurring debt, subject to permitted exceptions;

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a prohibition against making dividends, distributions and redemptions, subject to permitted exceptions;

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a prohibition against making investments, loans and advances, subject to permitted exceptions;

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restrictions on creating liens and leases on the assets of the Company and its subsidiaries, subject to permitted exceptions;

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restrictions on merging and selling assets outside the ordinary course of business;

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restrictions on use of proceeds, investments, transactions with affiliates or change of principal business;

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a provision limiting oil and natural gas derivative financial instruments;

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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

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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 March 31, 2012, 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 March 31, 2012.

Senior unsecured notes. During 2011, the Company issued $400.0 million of 7.25% senior unsecured notes due February 1, 2019 (the "2019 Notes") and $400.0 million of 6.5% senior unsecured notes due November 1, 2021 (the "2021 Notes"), collectively the "Notes". Interest on the Notes is payable semi-annually in arrears. The 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 Notes resulted in net proceeds to the Company of approximately $783.4 million.

The Notes were issued under indentures, which are substantially the same, as amended and supplemented by supplemental indentures (collectively the "Indentures"), among the Company, the Guarantors and U.S. Bank National Association, as trustee (the "Trustee"). The Company has certain options to redeem up to 35% of the Notes at a certain redemption price based on a percentage 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 Notes remains outstanding after such redemption. Prior to certain dates, the Company has the options to redeem some or all of the Notes for cash at certain redemption prices equal to a certain percentage of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. The Company estimates that the fair value of these options are immaterial at March 31, 2012.

The Indentures restrict 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 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 Indentures) 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 Indentures contains customary events of default, including:

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default in any payment of interest on any Note when due, continued for 30 days;

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default in the payment of principal or premium, if any, on any Note when due;

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failure by the Company to comply with its other obligations under the Indentures, in certain cases subject to notice and grace periods;

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payment defaults and accelerations with respect to other indebtedness of the Company and its Restricted Subsidiaries (as defined in the Indentures) in the aggregate principal amount of $10.0 million or more;

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certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (as defined in the Indentures) or group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;

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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

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any guarantee of the 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 costs. As of March 31, 2012, the Company had $17.8 million of deferred financing costs related to the Amended Credit Facility and the Notes. The deferred financing costs are included in Deferred costs and other assets on the Company's Condensed Consolidated Balance Sheet at March 31, 2012 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 Condensed Consolidated Statement of Operations.