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LONG-TERM DEBT
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
LONG-TERM DEBT LONG-TERM DEBT
Senior Notes
Senior Notes are recorded net of unamortized discount and unamortized deferred financing costs within senior notes on the accompanying balance sheets, with no associated premiums. The table below presents the related carrying values as of December 31, 2023 (in thousands):
As of December 31, 2023
Interest Rate
Interest payment DatesPrincipal AmountUnamortized DiscountUnamortized Deferred Financing CostsPrincipal Amount, Net
2026 Senior Notes5.000 %
April 15, October 15
$400,000 $— $5,071 $394,929 
2028 Senior Notes8.375 %
January 1, July 1
1,350,000 15,932 5,605 1,328,463 
2030 Senior Notes8.625 %
May 1, November 1
1,000,000 12,283 3,317 984,400 
2031 Senior Notes8.750 %
January 1, July 1
1,350,000 16,319 5,741 1,327,940 
Total$4,100,000 $44,534 $19,734 $4,035,732 
2030 Senior Notes. On October 17, 2023, we issued $1.0 billion aggregate principal amount of 8.625% Senior Notes due November 1, 2030 (the “2030 Senior Notes”), among us, Computershare Trust Company, N.A., as trustee, and the guarantors party thereto. Upon issuance of the 2030 Senior Notes, we received net proceeds of $987.5 million after deducting fees of $12.5 million. The net proceeds, together with cash on hand, funded a portion of the consideration for the Vencer Acquisition.
At any time prior to November 1, 2026, we may redeem all or part of the 2030 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after November 1, 2026, we may redeem all or part of the 2030 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 104.313% for the twelve-month period beginning on November 1, 2026; (ii) 102.156% for the twelve-month period beginning on November 1, 2027; and (iii) 100.000% for the period beginning November 1, 2028 and at any time thereafter, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of the noteholders on the relevant record date to receive interest on the relevant interest payment date).
We may redeem up to 35% of the aggregate principal amount of the 2030 Senior Notes at any time prior to November 1, 2026 with an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 108.625% of the principal amount of the 2030 Senior Notes redeemed, plus accrued and unpaid interest, if any, provided, however, that (i) at least 65.0% of the aggregate principal amount of 2030 Senior Notes originally issued on the issue date (but excluding 2030 Senior Notes held by us and our subsidiaries) remains outstanding immediately after the occurrence of such redemption (unless all such 2030 Senior Notes are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days after the date of the closing of such equity offering.
2028 Senior Notes and 2031 Senior Notes. On June 29, 2023, we issued $1.35 billion aggregate principal amount of 8.375% Senior Notes due July 1, 2028 (the “2028 Senior Notes”), among us, Computershare Trust Company, N.A., as trustee, and the guarantors party thereto, and $1.35 billion aggregate principal amount of 8.750% Senior Notes due July 1, 2031 (the “2031 Senior Notes”), among us, Computershare Trust Company, N.A., as trustee. Upon issuance of the 2028 Senior Notes and 2031 Senior Notes, we received net proceeds of $2.67 billion after deducting fees of $33.8 million. The net proceeds, together with cash on hand and borrowings under the Credit Facility (as defined below), were used to fund a portion of the consideration for the Hibernia Acquisition and Tap Rock Acquisition.
At any time prior to July 1, 2025, we may redeem all or part of the 2028 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after July 1, 2025, we may redeem all or part of the 2028 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 104.188% for the twelve-month period beginning on July 1, 2025; (ii) 102.094% for the twelve-month period beginning on July 1, 2026; and (iii) 100.000% for the period beginning July 1, 2027 and at any time thereafter, plus accrued and unpaid interest, if any to, but excluding the redemption date.
At any time prior to July 1, 2026, we may redeem all or part of the 2031 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after July 1, 2026, we may redeem all or part of the 2031 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 104.375% for the twelve-month period beginning on July 1, 2026; (ii) 102.188% for the twelve-month period beginning on July 1, 2027; and (iii) 100.000% for the period beginning July 1, 2028 and at any time thereafter, plus accrued and unpaid interest, if any.
We may redeem up to 35% of the aggregate principal amount of the 2028 Senior Notes or 2031 Senior Notes at any time prior to July 1, 2025 or 2026, respectively, with an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 108.375%, with respect to the 2028 Senior Notes, and 108.750%, with respect to the 2031 Senior Notes, of the principal amount of such series of 2028 Senior Notes and 2031 Senior Notes redeemed, plus accrued and unpaid interest, if any, provided, however, that (i) at least 65.0% of the aggregate principal amount of 2028 Senior Notes and 2031 Senior Notes of such series originally issued on the issue date (but excluding the 2028 Senior Notes and 2031 Senior Notes of such series held by us and our subsidiaries) remains outstanding immediately after the occurrence of such redemption (unless all such 2028 Senior Notes and 2031 Senior Notes are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days after the date of the closing of such equity offering.
2026 Senior Notes. On October 13, 2021, we issued $400.0 million aggregate principal amount of 5.000% Senior Notes due November 1, 2026 (the “2026 Senior Notes”), among us, Wells Fargo Bank, National Association, as trustee, and the guarantors party thereto. As of December 31, 2022, we had unamortized deferred financing costs of $6.7 million and total principal amount, net outstanding of $393.3 million.
On or after October 15, 2023, we may redeem all or part of the 2026 Senior Notes at redemption prices equal to (i) 102.500% for the twelve-month period beginning on October 15, 2023; (ii) 101.250% for the twelve-month period beginning on October 15, 2024; and (iii) 100.000% for the twelve-month period beginning October 15, 2025 and at any time thereafter, plus accrued and unpaid interest, if any.
Guarantees. The 2026 Senior Notes, 2028 Senior Notes, 2030 Senior Notes, 2031 Senior Notes, (collectively, the “Senior Notes”) are fully and unconditionally guaranteed on a senior unsecured basis by all of our existing subsidiaries and are expected to be guaranteed by certain other future subsidiaries that may be required to guarantee the Senior Notes.
The indentures governing the Senior Notes contain covenants that limit, among other things, our ability and the ability of our subsidiaries to: (i) incur or guarantee additional indebtedness; (ii) create liens securing indebtedness; (iii) pay dividends on or redeem or repurchase stock or subordinated debt; (iv) make specified types of investments and acquisitions; (v)enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us; (vi) enter into transactions with affiliates; and (vii) sell assets or merge with other companies. These covenants are subject to a number of important limitations and exceptions. We were in compliance with all covenants and all restricted payment provisions related to our Senior Notes through the filing of this report.
7.500% 2026 Senior Notes. In 2021, we issued $100.0 million aggregate principal amount of 7.500% Senior Notes due 2026 by and among us, U.S. Bank National Association, as trustee, and the guarantors party thereto. In May 2022, we redeemed all of the issued and outstanding 2026 Senior Notes at 100.0% of their aggregate principal amount, plus accrued and unpaid interest thereon to the redemption date.
Credit Facility
We are party to a reserve-based revolving facility, as the borrower, with JPMorgan Chase Bank, N.A. (“JPMorgan”), as the administrative agent, and a syndicate of financial institutions, as lenders, that has an aggregate maximum commitment amount of $4.0 billion and is set to mature on August 2, 2028 (together with all amendments thereto, the “Credit Facility” or the “Credit Agreement”).
The Credit Facility is guaranteed by all our restricted domestic subsidiaries and is secured by first priority security interests on substantially all assets, including a mortgage on at least 90% of the total value of the proved properties evaluated in the most recently delivered reserve reports prior to the amendment effective date, including any engineering reports relating to the crude oil and natural gas properties of our restricted domestic subsidiaries, subject to customary exceptions.
The Credit Facility contains customary representations and affirmative covenants. The Credit Facility also contains customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) liens, (ii) indebtedness, guarantees and other obligations, (iii) restrictions in agreements on liens and distributions, (iv) mergers or consolidations, (v) asset sales, (vi) restricted payments, (vii) investments, (viii) affiliate transactions, (ix) change of business, (x) foreign operations or subsidiaries, (xi) name changes, (xii) use of proceeds, letters of credit, (xiii) gas imbalances, (xiv) hedging transactions, (xv) additional subsidiaries, (xvi) changes in fiscal year or fiscal quarter, (xvii) operating leases, (xviii) prepayments of certain debt and other obligations, (xix) sales or discounts of receivables, (xx) dividend payment thresholds, and (xxi) cash balances. 
In addition, we are subject to certain financial covenants under the Credit Facility, as tested on the last day of each fiscal quarter, including, without limitation, (a) permitted net leverage ratio of 3.00 to 1.00 and (b) a current ratio, inclusive of the unused commitments then available to be borrowed, to not be less than 1.00 to 1.00. Borrowings under the Credit Facility bear interest at a per annum rate equal to, at our option, either (i) the Alternate Base Rate (“ABR”, for ABR revolving credit loans) plus the applicable margin, or (ii) the term-specific Secured Overnight Financing Rate (“SOFR”) plus the applicable margin. ABR is established as a rate per annum equal to the greatest of (a) the rate of interest publicly announced by JPMorgan as its prime rate, (b) the applicable rate of interest published by the Federal Reserve Bank of New York plus 0.5%, or (c) the term-specific SOFR plus 1.0%, subject to a 1.5% floor plus the applicable margin of 1.0% to 2.0%, based on the utilization of the Credit Facility. Term-specific SOFR is based on one-, three-, or six-month terms as selected by us and is subject to a 0.5% floor plus the applicable margin of 2.0% to 3.0%, based on the utilization of the Credit Facility. Interest on borrowings that bear interest at the SOFR are payable on the last day of the applicable interest period selected by us, and interest on borrowings that bear interest at the ABR are payable quarterly in arrears.
In connection with the Hibernia Acquisition and the Tap Rock Acquisition, we entered into amendments to the Credit Agreement. Pursuant to the amendments, we were authorized to, among other things, (i) offer and issue the 2028 Senior Notes and the 2031 Senior Notes, (ii) incur indebtedness pursuant to those certain debt commitment letters by and among us, Bank of America N.A., BofA Securities, Inc., and JPMorgan Chase Bank, N.A. providing for two separate 364-day bridge loan facilities in an aggregate principal amount of up to $2.7 billion (such facilities, the “Bridge Facilities” and the loans made thereunder, the “Bridge Loans”), the proceeds of which would have, if drawn, been used to partially fund the Hibernia Acquisition and the Tap Rock Acquisition, (iii) incur the debt described in the immediately preceding clauses (i) and (ii) without any corresponding reduction in the borrowing base of the Credit Facility, (iv) aggregate elected commitments increased from $1.0 billion to $1.85 billion, the borrowing base increased from $1.85 billion to $3.0 billion, and the aggregate maximum credit commitment increased from $2.0 billion to $4.0 billion and (v) incur pari passu term loan indebtedness subject to a total secured leverage test of 2.00 to 1.00 and certain other customary terms and conditions.
Because the 2028 Senior Notes and 2031 Senior Notes successfully closed, we did not draw on the Bridge Loans and have terminated the commitments under the Bridge Facilities. Consequently, $21.0 million of fees associated with the Bridge Facilities in relation to the Hibernia and Tap Rock acquisitions were incurred and expensed to transaction costs in the accompanying statements of operations for the year ended December 31, 2023.
In addition, the maturity of the Credit Facility was extended to August 2028. The next scheduled borrowing base redetermination date is set to occur in May 2024.
Finally, in connection with the entry into the Vencer Acquisition Agreement, on October 6, 2023, we entered into an amendment to the Credit Agreement (the “Fifth Amendment”). The Fifth Amendment amends the Credit Agreement to, among other things, permit us to incur an aggregate of up to $1.5 billion of indebtedness comprised of new senior unsecured notes, unsecured Bridge Facilities or a combination thereof, provided the proceeds therefrom are used to fund the transactions contemplated by the Purchase and Sale Agreement, dated October 3, 2023, by and between us and Vencer Energy, LLC. The Fifth Amendment additionally effectuates certain other modifications to the Credit Agreement, including (a) amending the general indebtedness basket therein to (i) increase the pro forma leverage restriction applicable thereto from 2.50 to 1.00 to 3.00 to 1.00 and (ii) include carveouts for customary bridge facilities and bonds with customary mandatory redemption provisions (in each case, not tied to any specific acquisition), (b) amending the general restricted payment basket therein to (i) increase the pro forma leverage restriction applicable thereto from 1.75 to 1.00 to 3.00 to 1.00 and (ii) increase the pro forma maximum utilization percentage restriction applicable thereto from 75% to 80%, (c) amending the general investment basket therein to (i) increase the pro forma leverage restriction applicable thereto from 1.00 to 1.00 to 3.00 to 1.00, and (ii) increase the pro forma maximum utilization percentage restriction applicable thereto from 75% to 80%, (d) amending the general basket for the covenant regarding prepayments of certain other indebtedness to increase the pro forma leverage restriction applicable thereto from 1.00 to 1.00 to 3.00 to 1.00 and (e) removing the minimum hedging affirmative covenant therein. We were in compliance with all covenants under the Credit Facility as of December 31, 2023 and through the filing of this report. Because the 2030 Senior Notes successfully closed and were issued on October 17, 2023, we did not draw on the Bridge Loans and have terminated the commitments under the Bridge Facilities. Consequently, $7.6 million of fees associated with the Bridge Facilities in relation to the Vencer acquisition were incurred and expensed to transaction costs in the accompanying statements of operations for the year ended December 31, 2023.
The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Facility as of the dates indicated (in thousands):
February 27, 2024December 31, 2023December 31, 2022
Credit Facility
$400,000 $750,000 $— 
Letters of credit2,100 2,100 12,100 
Available borrowing capacity1,447,900 1,097,900 987,900 
Total aggregate elected commitments
$1,850,000 $1,850,000 $1,000,000 
As of December 31, 2023 and 2022, the unamortized deferred financing costs associated with the amendments to the Credit Facility were $34.4 million and $8.5 million, respectively. Of the unamortized deferred financing costs, (i) $26.9 million and $5.5 million are presented within other noncurrent assets on the accompanying balance sheets as of December 31, 2023 and 2022, respectively, and (ii) $7.5 million and $3.0 million are presented within prepaid expenses and other on the accompanying balance sheets as of December 31, 2023 and 2022, respectively.
Interest Expense
For the years ended December 31, 2023, 2022, and 2021, we incurred interest expense of $182.7 million, $32.2 million, and $9.7 million respectively.