UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
April
30, 2009
Date of
Report (Date of earliest event reported)
ABRAXAS
PETROLEUM CORPORATION
(Exact
name of registrant as specified in its charter)
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Nevada
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1-16071
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74-2584033
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification Number)
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18803 Meisner
Drive
San Antonio,
Texas 78258
(210)
490-4788
(Address
of principal executive offices and Registrant’s telephone number, including area
code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material
Definitive Agreement
Amendment
to Amended and Restated Credit Agreement
On April
30, 2009, Abraxas Energy Partners, L.P., an indirect subsidiary of Abraxas
Petroleum Corporation, which we refer to as the Partnership, entered into an
amendment to its amended and restated senior secured revolving credit facility
with Société Générale, as administrative agent and issuing lender, The Royal
Bank of Canada, as syndication agent, The Royal Bank of Scotland PLC, as
documentation agent and the lenders signatory thereto, which we refer to as the
Credit Facility. The Credit Facility has a maximum commitment of $300.0 million.
Availability under our credit facility is subject to a borrowing base. Under the
terms of the amendment, the borrowing base under the credit facility is now
$130.0 million. At December 31, 2008, the borrowing base was $140.0 million. The
borrowing base is determined semi-annually by the lenders based upon the
Partnership’s reserve reports, one of which must be prepared by its independent
petroleum engineers and one of which may be prepared internally. The amount of
the borrowing base is calculated by the lenders based upon their valuation of
the Partnership’s proved reserves utilizing these reserve reports and their own
internal decisions. In addition, the lenders, in their sole discretion, may make
one additional borrowing base redetermination during any six-month period
between scheduled redeterminations and the Partnership may also request one
redetermination during any six-month period between scheduled redeterminations.
The lenders may also make a redetermination in connection with any sales of
producing properties with a market value of 5% or more of our current borrowing
base. The Partnership’s borrowing base of $130.0 million was determined based
upon its reserve report dated December 31, 2008. The Partnership’s borrowing
base can never exceed the $300.0 million maximum commitment amount. At April 30,
2009, the Partnership had a total of $125.6 million outstanding under the Credit
Facility.
Under the
terms of the amendment, the loan matures on January 31, 2012 and outstanding
amounts under the Credit Facility bear interest at (a) the greater of (1) the
reference rate announced from time to time by Société Générale, (2) the Federal
Funds Rate plus 0.5%, and (3) a rate determined by Société Générale as the daily
one-month LIBOR plus, in each case, (b) 1.5% - 2.5%, depending on the
utilization of the borrowing base, or, if the Partnership elects, (a) the
greater of (1) 2% and (2) LIBOR plus, in each case, 2.5% - 3.5% depending on the
utilization of the borrowing base;. At April 30, 2009, the interest rate on the
Credit Facility was 5.5%. In connection with the amendment, the Partnership paid
an amendment fee of $325,000 to the lenders.
Under the
terms of the amendment, the amount of the cash distribution to be made by the
Partnership on or about May 15, 2009 attributable to the first quarter of 2009
is to be deposited into an escrow account established with one of the lenders.
The amount in the escrow account is to be held until the borrowings under the
Subordinated Credit Agreement are repaid.
The
amendment also required the Partnership to enter into hedging arrangements for
at least 60% of the volumes estimated to be produced from the Partnership’s net
proved developed producing reserves as estimated in the Partnership’s reserve
report dated December 31, 2008 for the calendar year 2012. As a
result, the Partnership entered into NYMEX-based fixed price swaps on 670
barrels of oil per day at $67.60 and 3,300 MMbtu of gas per day at $6.88 for the
calendar year 2012.
Amendment
to Subordinated Credit Agreement
On April
30, 2009, the Partnership entered into an amendment to its subordinated credit
facility with Société Générale, as administrative agent, The Royal Bank of
Canada, as syndication agent, and the lenders signatory thereto, which we refer
to as the Subordinated Credit Agreement. Under the terms of the
amendment to the Subordinated Credit Agreement, outstanding amounts bear
interest at (a) the
greater of (1) the reference rate announced from time to time by Société
Générale, (2) the Federal Funds Rate plus 0.5% and (3) a rate determined by
Société Générale as the daily one-month LIBOR, plus in each case (b) 9.0% or, if
the Partnership elects, at the greater of (1) 2.0% and (2) LIBOR, plus in each
case 10.0%. At April 7, 2009, the interest rate on the facility was
10.5%. At April 30, 2009, the interest rate on the Subordinated
Credit Agreement was 12.5%.
The
amendment also amended an event of default. Previously, an event of default
would have occurred if the Partnership had failed to receive $20.0 million of
proceeds from an equity issuance on or before April 30, 2009. This date has been
changed to May 7, 2009.
The
summaries of the amendments to the Credit Facility and the Subordinated Credit
Agreement under this Item 1.01 are qualified in their entirety by the
copies thereof filed as Exhibits 10.1 and 10.2, respectively, to this Form 8-K,
which are incorporated in this Item 1.01 by reference.
Item
9.01 Financial Statements and
Exhibits.
(c) Exhibits.
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Exhibit
10.1
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Amendment
No. 2 to Amended and Restated Credit Agreement dated April 30, 2009, by
and among Abraxas Energy Partners, L.P., Société Générale, as
administrative agent and issuing lender, The Royal Bank of Canada, as
syndication agent and the lenders signatory
thereto.
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Exhibit
10.2
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Amendment
No. 2 to Subordinated Credit Agreement dated April 30, 2009 by and among
Abraxas Energy Partners, L.P., Société Générale, as administrative agent,
The Royal Bank of Canada, as syndication agent, and the lenders signatory
thereto.
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Exhibit
99.1
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Press
Release dated April 30, 2009.
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
ABRAXAS
PETROLEUM CORPORATION
By: /s/
Chris E.
Williford
Chris E.
Williford
Executive
Vice President, Chief Financial
Officer
and Treasurer
Dated: May
6, 2009