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DEBT | 6 Months Ended
--- | ---
Jun. 30, 2025
DEBT |
DEBT | 5. DEBT The Company’s debt consisted of the following for the periods presented (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2025 | ​ | ​ | December 31, 2024
Term loan credit facility | ​ | $ | 219,375 | ​ | ​ | $ | 162,000
Other | ​ | ​ | 53 | ​ | ​ | ​ | 106
Total debt (Face Value) | ​ | ​ | 219,428 | ​ | ​ | ​ | 162,106
Less: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current portion of long-term debt(1) | ​ | ​ | (22,553) | ​ | ​ | ​ | (12,246)
Other(2) | ​ | ​ | (5,408) | ​ | ​ | ​ | (4,325)
Long-Term Debt, net | ​ | $ | 191,467 | ​ | ​ | $ | 145,535
(1) | Amounts primarily reflect amortization payments of $22.5 million and $12.2 million due under the Company’s 2024 Amended Term Loan Agreement within one year at June 30, 2025 and December 31, 2024, respectively.
(2) | Amounts reflect unamortized debt discount and issuance costs of approximately $5.4 million and $4.3 million at June 30, 2025 and December 31, 2024, respectively. For the six months ended June 30, 2025 and 2024, the Company recorded approximately $0.8 million and $3.4 million, respectively, in interest expense reflecting the amortization/accretion of deferred financing costs and debt discount.
Amended and Restated Credit Agreement On December 26, 2024 (the “Initial Closing Date”), Halcón Holdings, LLC (the “Borrower”), a wholly-owned subsidiary of the Company, entered into a Second Amended and Restated Senior Secured Credit Agreement (the “2024 Term Loan Agreement”) with Fortress Credit Corp., as administrative agent, and certain other financial institutions party thereto, as lenders. The 2024 Term Loan Agreement amends and restates in its entirety the Company’s 2021 Amended Term Loan Agreement (as defined below). Pursuant to the 2024 Term Loan Agreement, the lenders party thereto agreed to provide the Borrower with (i) an initial term loan facility in the aggregate principal amount of $162.0 million, funded on December 26, 2024 and (ii) an incremental term loan facility in the aggregate principal amount of up to $63.0 million to be made available to the Borrower from January 3, 2025 until the date that was the earliest to occur of (x) the date on which such incremental term facility is fully drawn, (y) the date on which such incremental term facility is terminated and (z) January 11, 2025, subject to the satisfaction of certain conditions. On January 9, 2025, the Borrower entered into a first amendment (the “First Amendment”) to its 2024 Term Loan Agreement (as amended, the “2024 Amended Term Loan Agreement”). Pursuant to the First Amendment, the Borrower incurred incremental term loans in the aggregate principal amount of $63.0 million (the “Incremental Term Loans”). The net proceeds of the 2024 Term Loan Agreement were used to repay all outstanding indebtedness under the 2021 Amended Term Loan Agreement, including accrued and unpaid interest, in an aggregate amount of approximately $152.1 million and to pay related fees and expenses. For the year ended December 31, 2024, the Company recognized a loss on extinguishment of debt in the amount of $7.5 million resulting from the credit agreement refinancing on December 26, 2024 which included a $3.6 million non-cash write-off of deferred financing costs, original issue discounts and embedded derivatives associated with the extinguished debt and $3.9 million in fees and debt issuance costs paid for the new debt. Additionally, the Company deferred $4.3 million of original issue discount and financing costs on the unaudited condensed consolidated balance sheet at December 31, 2024 in conjunction with entry into the 2024 Term Loan Agreement and deferred an additional $1.8 million of original issue discount and financing costs on the unaudited condensed consolidated balance sheet at June 30, 2025 in conjunction with the issuance of the Incremental Term Loans in January 2025. The maturity date of the 2024 Amended Term Loan Agreement is December 26, 2028. Borrowings under the 2024 Amended Term Loan Agreement bear interest at a rate per annum equal to a forward-looking term rate based on the Secured Overnight Financing Rate (“SOFR”) for a tenor of three months (with a credit spread adjustment of 0.15% per annum) (or another applicable reference rate, as determined pursuant to the terms of the 2024 Amended Term Loan Agreement) plus an applicable margin of 7.75%. The weighted average interest rate on the Company’s borrowings under the 2024 Amended Term Loan Agreement for the quarter ended June 30, 2025 was 12.20%. The Borrower may elect, at its option, to prepay any borrowing outstanding under the 2024 Amended Term Loan Agreement. Such voluntary prepayments, certain mandatory prepayments and change of control prepayments are subject to the following prepayment premium, as applicable: ​
​ | ​ | ​ | ​
Period | ​ | ​ | Premium
Months 0 - 12 | ​ | ​ | Make-whole amount equal to 12 months of interest plus 4.00%
Months 13 - 30 | ​ | ​ | 2.00%
Thereafter | ​ | ​ | 0.00%
​ In the event the Borrower shall receive a disapproval notice (as defined in the 2024 Term Loan Agreement) from the required lenders under the 2024 Amended Term Loan Agreement rejecting or otherwise disqualifying a proposed buyer in connection with a permitted change in control thereunder to be consummated within 12 months following the Initial Closing Date, such voluntary prepayments, certain mandatory prepayments and change of control prepayments are subject to the following prepayment premium, as applicable: ​
​ | ​ | ​ | ​
Period | ​ | ​ | Premium
Months 0 - 9 | ​ | ​ | Make-whole amount equal to 9 months of interest plus 2.00%
Months 10 - 30 | ​ | ​ | 2.00%
Thereafter | ​ | ​ | 0.00%
​ The Borrower may be required to make mandatory prepayments of the loans under the 2024 Amended Term Loan Agreement in connection with the incurrence of non-permitted debt, certain asset sales and with excess cash on hand in excess of certain maximum levels. The Borrower is required to make scheduled quarterly amortization payments in an aggregate principal amount equal to 2.50% of the total aggregate principal amount of the loans outstanding and such payments commenced with the $5.6 million repayment for fiscal quarter ending June 30, 2025. Amounts outstanding under the 2024 Amended Term Loan Agreement are guaranteed by certain of the Borrower’s direct and indirect subsidiaries and secured by a security interest in substantially all of the assets of the Borrower and such direct and indirect subsidiaries, and of the equity interests of the Borrower held by the Company. The 2024 Amended Term Loan agreement contains certain financial covenants (as defined in the 2024 Term Loan Agreement), including the maintenance of the following ratios:
| ● | Asset Coverage Ratio not to fall below 1.70 x as of March 31, 2025 through and including June 30, 2025, 1.85 x as of September 30, 2025 through and including December 31, 2025 and 2.00 x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter;
| ● | Total Net Leverage Ratio not to exceed 2.75 x as of March 31, 2025 through and including June 30, 2025 and 2.50 x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter;
| ● | Current Ratio not to fall below 1.00 x, determined on the last day of each calendar month commencing with the calendar month ending March 31, 2025; and
| ● | Liquidity not to fall below the greater of (x) $10,000,000 and (y) the amount equal to the scheduled principal and interest payments for the immediately succeeding three-month period, determined as of the last day of any fiscal quarter.
At June 30, 2025, the Company was in compliance with all financial covenants under the 2024 Amended Term Loan Agreement. Under the 2024 Amended Term Loan Agreement, the Company is required to hedge approximately 85% to 50% of its anticipated oil and natural gas production, in varying percentages by year, on a rolling basis for the next four years. Entry into the 2024 Term Loan Agreement did not result in any material changes to the Company’s hedges. The 2024 Amended Term Loan Agreement also contains certain events of default, including non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy. In conjunction with entering into the 2024 Term Loan Agreement, the Company agreed to pay an exit fee equal to the amount resulting from multiplying 3.50% by the difference, if any, of (x) Total proved developed producing (“PDP”) PV-10 (the “PDP PV-10”) as of the date that is the earlier of (i) Payment in Full, (ii) the Maturity Date, or (iii) the loans and other obligations otherwise becoming immediately due and payable pursuant to Section 10.02 of the 2024 Term Loan Agreement (including whether, in the case of clauses (i) or (iii), such Payment in Full or acceleration, respectively, may be made in connection with a refinancing transaction or a disposition of all or substantially all of the assets of the Company) (such earlier date, the “Exit Fee Determination Date”), less (y) the Total PDP PV-10 reflected in the Initial Reserve Report (as defined in the 2024 Term Loan Agreement) (the “Exit Fee”). Upon evaluation of the payoff profiles associated with the Exit Fee, the Company concluded that such embedded features resulting from the application of this fee were not clearly and closely related to the host debt instrument. The fair value analysis for such derivative was performed and the fair value was deemed to be zero at commencement, at December 31, 2024 and at June 30, 2025. Refer to Note 6, “Fair Value Measurements,” for a discussion of the valuation approach used and the significant inputs to the valuation for the Exit Fee derivative. Term Loan Credit Facility On November 24, 2021, the Company and Borrower entered into an Amended and Restated Senior Secured Credit Agreement (the “2021 Term Loan Agreement”) with Macquarie Bank Limited, as administrative agent, and certain other financial institutions party thereto, as lenders, having a maturity date of November 24, 2025 (as subsequently amended, the “2021 Amended Term Loan Agreement”). All obligations under the 2021 Amended Term Loan Agreement were refunded, refinanced and repaid in full by the loans under the 2024 Term Loan Agreement on December 26, 2024. Borrowings under the 2021 Amended Term Loan Agreement bore interest at a variable interest rate based on SOFR plus an applicable margin of 7.5%. The weighted average interest rate on the Company’s term loan borrowings under the 2021 Amended Term Loan Agreement for the quarter ended June 30, 2024 was approximately 12.95%.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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