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Senior Secured Credit Agreement
 6 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Senior Secured Credit Agreement Senior Secured Credit Agreement
On April 11, 2016, the Company entered into a three-year, senior secured reserve-based credit facility (the “Senior Secured Credit Facility”) in an amount up to $50 million. On November 2, 2020, the Company entered into the Fifth Amendment to the Senior Secured Credit Facility extending the maturity to April 9, 2024. On August 5, 2021, and effective as of June 30, 2021, the Company entered into the Seventh Amendment of the Senior Secured Credit Facility which added definitions for the terms “Acquired Entity or Mineral Interests” and “Acquired Entity or Mineral Interests EBITDA Adjustment.” Additionally, the Consolidated Tangible Net Worth covenant level was reduced to $40 million from $50 million. On November 9, 2021, the Company entered into the Eighth Amendment to the Senior Secured Credit Facility. This amendment increased the borrowing base to $50 million and added a hedging covenant whereby the Company must hedge from 25 to 75 percent of future production on a rolling twelve-month basis when 25 percent or more of the borrowing base is utilized. The Company has elected a $40 million commitment amount for the Senior Secured Credit Facility. On February 7, 2022, the Company entered into the Ninth Amendment to the Senior Secured Credit Facility. This amendment modified the definition of utilization percentage related to the required hedging covenant such that for the purposes of determining the amount of future production to hedge, the utilization of the Senior Secured Credit Facility will be based on the calculated collateral value to the extent it exceeds the borrowing base then in effect. See Note 18- Subsequent Events, for further information.
At December 31, 2021 the Company was in compliance with the financial covenants under the Senior Secured Credit Facility, which is secured by substantially all of the Company's assets. At December 31, 2021, the Company had $4.0 million outstanding under its Senior Secured Credit Facility, resulting in $36.0 million of available borrowing capacity.
Borrowings from the Senior Secured Credit Facility may be used for the acquisition and development of oil and natural gas properties, investments in cash flow generating assets complimentary to the production of oil and natural gas, and for letters of credit or other general corporate purposes.
The Senior Secured Credit Facility included a placement fee of 0.50% on the initial borrowing base amounting to $50 million and carries a commitment fee of 0.25% per annum on the undrawn portion of the borrowing base. Any borrowings under the Senior Secured Credit Facility will bear interest, at the Company’s option, at either London Interbank Offered Rate (“LIBOR”) plus 2.75%, subject to a minimum LIBOR of 0.25%, or the Prime Rate, as defined under the Senior Secured Credit Facility, plus 1.00%. The Senior Secured Credit Facility contains financial covenants including a requirement that the Company maintain, as of the last day of each fiscal quarter, (a) a maximum total leverage ratio of not more than 3.00 to 1.00, (b) a current ratio of not less than 1.00 to 1.00, and (c) a consolidated tangible net worth of not less than $40 million, all as defined under the
Senior Secured Credit Facility.