PRIMEENERGY RESOURCES CORPPNRG
PRIMEENERGY RESOURCES CORP Debt Disclosure
4. Long-Term
Deb
t Bank Debt:
On February 15, 2017, the Company and its lenders entered into a Third Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with a maturity date of February 15, 2021.
Under
the 2017 Credit Agreement, the Company has a revolving line of credit and letter of credit facility of up to $300 million subject to a borrowing base that is determined semi-annually by the lenders based upon the Company’s financial statements and the estimated value of the Company’s oil and gas properties, in accordance with the Lenders’ customary practices for oil and gas loans. The credit facility is secured by substantially all of the Company’s oil and gas properties. The 2017 Credit Agreement includes terms and covenants that require the Company to maintain a minimum current ratio and
total indebtedness to EBITDAX (earnings before depreciation, depletion, amortization, taxes, interest expense and exploration costs) ratio, as defined, and restrictions are placed on the payment of dividends, the amount of treasury stock the Company may purchase, commodity hedge agreements, and loans and investments in its consolidated subsidiaries and limited partnerships.
During 2020, the 2017 Credit Agreement was amended to add loans under the Paycheck Protection Program to the Permitted loans, as defined in the agreement.
On February 11, 2021, the Company and its lenders entered into a Sixth Amendment to the 2017 Credit Agreement. Under this amendment the Company’s borrowing base is $40 million. Borrowings under the 2017 Credit Agreement will bear interest at a base rate plus an applicable margin ranging from 2.00% to 3.00% or at the Company’s option, at LIBOR plus an applicable margin ranging from 3.00% to 4.00%. The 2017 Credit Agreement will mature on February 11, 2023. The Company’s borrowings under this credit facility approximates fair value because the interest rates are variable and reflective of market rates.
On December 20, 2021 the company entered into a Seventh Amendment to the 2017 Credit Agreement. At this time Credit Agreement will bear interest at alternate base rate(ABR) plus an applicable margin ranging from 2.00% to 3.00% or at the Company’s option, at SOFR rate plus an applicable margin ranging from 3.00% to 4.00%. SOFR means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator, in this case the Federal Reserve Bank of New York The 2017 Credit Agreement maturity date remains at February 11, 2023. The Company’s borrowings under this credit facility approximates fair value because the interest rates are variable and reflective of market rates.
,
Citibank N.A agreed to accept appointment as successor administrative agent from PNC Bank which was the successor to BBVA USA effective October 12, 2021. Under this amendment the Company’s borrowing base is $50 million. Borrowings under the 2017.
On December 31, 2021, the Company had a total of $36 million of borrowings outstanding under its revolving credit facility at a weighted-average interest rate of 5.38% and $14 million was available for future borrowings. The combined weighted average interest rate paid on outstanding bank borrowings subject to ABR base rate and SOFR interest was 5.29% for the year ended December 31, 2021 as compared to 3.95% for the year ended December
31, 2020.
On March 31, 2022, the outstanding borrowings under the Company’s revolving credit facility were $9,000,000.
Paycheck Protection Program Loans
During May 2020, Prime Operating Company and Eastern Oil Well Services Corporation, subsidiaries of the Company received loan proceeds in the amount of $1.28 million and $0.47 million, respectively, under the Paycheck Protection Program (the “PPP”) of the CARES Act, which was enacted March 27, 2020. The PPP Loans are evidenced by a promissory note in favor of the Lender, which bears interest at the rate of 1.00% per annum. No payments of principal or interest are due under the note until the date on which the amount of loan forgiveness (if any) under the CARES Act, which can be up to 10 months after the end of the related notes covered period (which is defined as 24 weeks after the date of the loan) (the “Deferral Period”). The note may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP Loans may be used only for payroll and related costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations that were incurred prior to February 15, 2020 (the “Qualifying Expenses”). Under the terms of the PPP Loans, certain amounts thereunder may be forgiven if they are used for Qualifying Expenses as described in and in compliance with the CARES Act. The Company utilized the PPP Loan proceeds exclusively for Qualifying Expenses during the and accrued interest.
24-week
coverage period and has
submitted
its application for forgiveness in accordance with the terms of the CARES Act and related guidance. In the event the PPP Loan or any portion thereof is forgiven, the amount forgiven is applied to the outstanding principalThe PPP loans have been approved for forgiveness by the Small Business Administration ( SBA) in conjunction with our lender PNC Bank. The effective date of February
18,
2022 for Eastern Oil Well Service Company in the amount of $
481 thousand in
,
PPP debt and any accrued interest were reclassed from the consolidated balance sheet and recorded in other income on the consolidated statement of operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Apr 21, 2022 | Showing above |
| 2020 | Apr 26, 2021 | |
| 2018 | Apr 16, 2019 | |
| 2017 | Apr 17, 2018 | |
| 2016 | Apr 18, 2017 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.