Minnesota-based Northern Oil and Gas Inc. has completed the assignment of its revolving credit facility to Macquarie Bank Ltd. from CIT Capital USA Inc., complete with an increase in the initial and maximum borrowing bases.
Northern Oil and Macquarie have entered into an amended credit agreement and related documents in connection with the assignment.
The new facility provides an increased initial borrowing base of $25 million and maximum borrowings of up to $100 million. The facility may be used to provide working capital for exploration and production operations. The new facility will have a four year term and does not contain any minimum interest rate on borrowings under the facility.
Borrowings, if any, will bear interest at a spread ranging from 2.00% to 3.25% over LIBOR or prime rate, as the case may be, based upon the percentage of borrowing base that is advanced at any given time.
Northern Oil has no current borrowings under the facility, no other debt and currently has approximately $85 million in cash on hand.
Michael Reger, CEO, commented, "We are very pleased to have closed on this facility that will provide non-dilutive funding for continued drilling activities for the foreseeable future. We believe this facility, along with our forecasted cash flow from producing wells, will enable Northern Oil to fund its anticipated development plans with a high degree of certainty at a very competitive cost of capital."
As of May 1st 2010, Northern Oil has hedged approximately 568,196 barrels of oil for delivery in 2010 and 2011 at an average price of approximately $80.50.
Northern Oil's core area of focus is the Williston Basin Bakken and Three Forks trend in North Dakota and Montana.
