Crimson Exploration refinances second lien facility

Crimson Exploration (NASDAQ: CXPO) expanded its second lien facility and extended its maturity by three years.

The new $175 million facility (placed at 96% of par) replaces the prior $150 million facility, carries interest rates approximately 250 bps higher, and matures December 27, 2015.

Covenants of the new facility require hedging of 80% of projected PDP natural gas and 75% of projected PDP liquids for 2011, declining to 65% for both in 2012.

Crimson has hedged 3,100 barrels of crude at $85.65 and approximately 232.5 MMcf of natural gas at $4.39/MMbtu, with the remainder of the hedges required in the next two weeks.

In conjunction, Crimson’s borrowing base was lowered from $95 million to $88.75 million, due to the expanded size of the new facility.

Global Hunter Securities estimates the net effect of the transaction is a $9 million to $10 million increase in liquidity for the company.

Source: Global Hunter Securities

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