Long-Term Debt

9 Months Ended

Sep. 30, 2024

Note 5 - Long-Term Debt

Credit Agreement

The Company’s Credit Agreement provides for a senior secured revolving credit facility with a maximum loan amount of $3.0 billion, and as of September 30, 2024, the borrowing base and aggregate lender commitments under the Credit Agreement were $2.5 billion and $1.25 billion, respectively.

Prior to the Second Amendment, as defined and discussed below, commitment fees on the unused portion of the aggregate lender commitment amount were accrued at rates from the borrowing base utilization grid set forth in the Credit Agreement, as presented in Note 5 - Long-Term Debt in the 2023 Form 10-K.

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of September 30, 2024, and December 31, 2023:


	As of September 30, 2024		As of December 31, 2023

	(in thousands)
Revolving credit facility (1)	$	—	$	—
Letters of credit (2)	2,000		2,500
Available borrowing capacity	1,248,000		1,247,500
Total aggregate lender commitment amount	$	1,250,000	$	1,250,000

____________________________________________

(1) Unamortized deferred financing costs attributable to the revolving credit facility are presented as a component of the other noncurrent assets line item on the accompanying balance sheets and totaled $8.9 million and $8.5 million as of September 30, 2024, and December 31, 2023, respectively. These costs are being amortized over the term of the revolving credit facility on a straight-line basis.

(2) Letters of credit outstanding reduce the amount available under the revolving credit facility on a dollar-for-dollar basis.

First Amendment. On July 2, 2024, the Company and its lenders entered into the First Amendment to the Credit Agreement (“First Amendment”) to amend certain provisions of the Credit Agreement to facilitate financing for the Uinta Basin Acquisition, as defined in Note 11 - Acquisitions.

Second Amendment. On October 1, 2024, the Company and its lenders entered into the Second Amendment to the Credit Agreement (“Second Amendment”) in conjunction with the closing of the Uinta Basin Acquisition, as defined in Note 11 - Acquisitions, to, among other things: (i) increase the aggregate revolving lender commitments available under the Credit Agreement from $1.25 billion to $2.0 billion; (ii) extend the maturity date of the Credit Agreement; and (iii) modify certain other provisions reflective of the increased aggregate revolving lender commitments, increased Company size and scale, and extended maturity date. The Credit Agreement is scheduled to mature on the earlier of (a) October 1, 2029 (“Stated Maturity Date”), or (b) 91 days prior to the maturity date of any of the Company’s outstanding Senior Notes, as defined below, to the extent that, on or before such date, the respective Senior Notes in an amount exceeding $50.0 million have not been repaid, exchanged, repurchased, refinanced, or otherwise redeemed in full, and, if refinanced or exchanged, with a scheduled maturity date that is not earlier than at least 180 days after the Stated Maturity Date.

Under the Second Amendment, interest and commitment fees associated with the revolving credit facility are accrued based on a total revolving commitments utilization grid set forth in the Second Amendment, and as presented in the table below. At the Company’s election, borrowings under the Credit Agreement may be in the form of Secured Overnight Financing Rate (“SOFR”) revolving loans, Alternate Base Rate (“ABR”) revolving loans, or Swingline loans. SOFR revolving loans accrue interest at SOFR plus the applicable margin from the utilization grid, and ABR revolving loans and Swingline loans accrue interest at a market-based floating rate, plus the applicable margin from the utilization grid. Commitment fees are accrued on the unused portion of the aggregate revolving lender commitment amount at rates from the utilization grid.


Total Revolving Commitments Utilization Percentage	<25%		≥25% <50%		≥50% <75%		≥75% <90%		≥90%
SOFR Revolving Loans	1.750	%	2.000	%	2.250	%	2.500	%	2.750	%
ABR Revolving Loans or Swingline Loans	0.750	%	1.000	%	1.250	%	1.500	%	1.750	%
Commitment Fee Rate	0.375	%	0.375	%	0.500	%	0.500	%	0.500	%

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of October 24, 2024:


	As of October 24, 2024

	(in thousands)
Revolving credit facility	$	159,000
Letters of credit (1)	2,000
Available borrowing capacity	1,839,000
Total aggregate lender revolving commitment amount	$	2,000,000

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(1) Letters of credit outstanding reduce the amount available under the revolving credit facility on a dollar-for-dollar basis.

On October 11, 2024, the Company’s lenders completed the semi-annual borrowing base redetermination, which resulted in an increase to the Company’s borrowing base to $3.0 billion and reaffirmed the aggregate revolving lender commitment at the existing amount of $2.0 billion. The next borrowing base redetermination date is scheduled to occur on April 1, 2025.

Senior Notes

The Company’s Senior Notes, net line item on the accompanying balance sheets as of September 30, 2024, and December 31, 2023, consisted of the following (collectively referred to as “Senior Notes”):


	As of September 30, 2024						As of December 31, 2023
	Principal Amount		Unamortized Deferred Financing Costs		Principal Amount, Net		Principal Amount		Unamortized Deferred Financing Costs		Principal Amount, Net

	(in thousands)
5.625% Senior Notes due 2025	$	—	$	—	$	—	$	349,118	$	896	$	348,222
6.75% Senior Notes due 2026	419,235		1,343		417,892		419,235		1,868		417,367
6.625% Senior Notes due 2027	416,791		1,813		414,978		416,791		2,395		414,396
6.5% Senior Notes due 2028	400,000		3,890		396,110		400,000		4,651		395,349
6.75% Senior Notes due 2029	750,000		11,061		738,939		—		—		—
7.0% Senior Notes due 2032	750,000		11,219		738,781		—		—		—
Total	$	2,736,026	$	29,326	$	2,706,700	$	1,585,144	$	9,810	$	1,575,334

On July 25, 2024, the Company issued $750.0 million in aggregate principal amount of its 6.75% Senior Notes at par with a maturity date of August 1, 2029 (“2029 Senior Notes”). The Company received net proceeds of $738.5 million after deducting fees of $11.5 million, which are being amortized as deferred financing costs over the life of the 2029 Senior Notes. Also on July 25, 2024, the Company issued $750.0 million in aggregate principal amount of its 7.0% Senior Notes at par with a maturity date of August 1, 2032 (“2032 Senior Notes”). The Company received net proceeds of $738.5 million after deducting fees of $11.5 million, which are being amortized as deferred financing costs over the life of the 2032 Senior Notes.

On August 26, 2024 (“Redemption Date”), the Company redeemed the $349.1 million of aggregate principal amount outstanding of its 5.625% Senior Notes due June 1, 2025 (“2025 Senior Notes”), pursuant to the terms of the indenture governing the 2025 Senior Notes which provided for a redemption price equal to 100 percent of the principal amount outstanding of the 2025 Senior Notes on the Redemption Date, plus accrued and unpaid interest. Upon redemption, the Company recorded a loss on extinguishment of debt of $0.5 million related to the accelerated expense recognition of the remaining unamortized deferred financing costs. The Company canceled all redeemed 2025 Senior Notes upon settlement.

The Senior Notes are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and any future unsecured senior debt and are senior in right of payment to any future subordinated debt. The Company may redeem some or all of its Senior Notes prior to their maturity at redemption prices that may include a premium, plus accrued and unpaid interest as described in the indentures governing the Senior Notes.

Covenants

The Company is subject to certain financial and non-financial covenants under the Credit Agreement and the indentures governing the Senior Notes that, among other terms, limit the Company’s ability to incur additional indebtedness, make restricted

payments including dividends, sell assets, create liens that secure debt, enter into transactions with affiliates, make certain investments, or merge or consolidate with other entities. The Company was in compliance with all financial and non-financial covenants as of September 30, 2024, and through the filing of this report. Please refer to Note 5 - Long-Term Debt in the 2023 Form 10-K, the First Amendment to the Credit Agreement, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2024, and the Second Amendment to the Credit Agreement, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 2, 2024, for additional detail on the Company’s covenants under the Credit Agreement and indentures governing the Senior Notes.

Capitalized Interest

Capitalized interest costs for the three months ended September 30, 2024, and 2023, totaled $5.4 million and $4.9 million, respectively, and totaled $17.6 million and $16.3 million for the nine months ended September 30, 2024, and 2023, respectively. The amount of interest the Company capitalizes generally fluctuates based on the amount borrowed, the Company’s capital program, and the timing and amount of costs associated with capital projects that are considered in progress. Capitalized interest costs are included in total costs incurred.