SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and ExchangeAct of 1934.
May 1, 2014
Date of Report
CIMAREX ENERGY CO.
(Exact name of registrant as specified in its charter)
Delaware |
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001-31446 |
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45-0466694 |
(State or other jurisdiction
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(Commission File Number) |
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(I.R.S. Employer
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1700 Lincoln Street, Suite 1800, Denver, Colorado |
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80203-4518 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code 303-295-3995
(Former name or former address, if changed since last report.)
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:
o Written communications pursuant to Rule 425 under the Securities Act
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
As described more fully under Item 2.03 below, which description is incorporated herein by reference, on May 1, 2014, Cimarex Energy Co. and its subsidiary guarantors (collectively, the Company) entered into a Second Amendment (the Second Amendment) to a Credit Agreement dated as of July 14, 2011, as previously amended by the First Amendment to Credit Agreement dated as of July 19, 2012 (collectively, the Credit Agreement), by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the Lenders party thereto. A copy of the Second Amendment is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On May 1, 2014, the Company entered into the Second Amendment to the Credit Agreement. The Credit Agreement initially provided for a senior unsecured revolving credit facility with an initial aggregate commitment from the lenders of $800 million (with an $80 million sub-limit for letters of credit), an initial borrowing base of $2.0 billion and an expiration of July 14, 2016.
The Second Amendment:
· increases the borrowing base from $2.0 billion to $2.5 billion until the next redetermination scheduled for April 2015
· extends the maturity date to July 14, 2018
· reduces the applicable margins for borrowings under the Credit Agreement so that, at Cimarexs option, borrowings under the Credit Agreement may bear interest at either:
a London Interbank Offered (LIBO) rate plus 1.5 to 2.25 percent, based on the leverage ratio, or
the higher of (i) a prime rate, (ii) the federal funds effective rate plus 0.50 percent, or (iii) a LIBO rate plus 1.00 percent plus, in each case, an additional 0.5 to 1.25 percent, based on the leverage ratio.
· reduces the commitment fee for unused borrowings to .3-0.50 percent, based on the leverage ratio.
The current aggregate commitment from lenders is $1.0 billion.
The Second Amendment is filed as an exhibit to this Current Report on Form 8-K and is incorporated herein by reference, and the Company is filing for informational purposes the First Amendment to Credit Agreement as an additional exhibit to this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Cimarex has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CIMAREX ENERGY CO. |
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Dated: May 5, 2014 |
By: |
/s/ Francis B. Barron |
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Francis B. Barron, |
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Senior Vice President and General Counsel |
Exhibit 10.1
Execution Version
FIRST AMENDMENT
TO
CREDIT AGREEMENT
DATED AS OF JULY 19, 2012
AMONG
CIMAREX ENERGY CO.,
AS BORROWER,
THE GUARANTORS,
JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT,
AND
THE LENDERS PARTY HERETO
J.P. MORGAN SECURITIES LLC,
as Sole Bookrunner
J.P. MORGAN SECURITIES LLC and WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this First Amendment ) dated as of July 19, 2012, is among CIMAREX ENERGY CO. , a Delaware corporation, (the Borrower ), the Guarantors signatory hereto, each of the lenders party to the Credit Agreement referred to below (collectively, the Lenders ), and JPMORGAN CHASE BANK, N.A. , as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the Administrative Agent ).
R E C I T A L S
A. The Borrower, the Administrative Agent, the Lenders and the other Agents party thereto are parties to that certain Credit Agreement dated as of July 14, 2011 (the Credit Agreement ), pursuant to which the Lenders have made certain credit and other financial accommodations available to and on behalf of the Borrower and its Subsidiaries.
B. The Borrower has requested and the Administrative Agent and the Lenders have agreed to amend certain provisions of the Credit Agreement.
C. Now, therefore, to induce the Administrative Agent and the Majority Lenders to enter into this First Amendment and in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms . Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this First Amendment. Unless otherwise indicated, all section references in this First Amendment refer to sections of the Credit Agreement.
Section 2. Amendments to Credit Agreement .
2.1 Amendment to Section 1.02 .
(a) Section 1.02 is hereby amended by deleting the defined term Agreement to read as follows:
Agreement means this Credit Agreement, as amended by that certain First Amendment dated as of July 19, 2012, and as the same may from time to time be further amended, modified, supplemented or restated.
(b) Section 1.02 is hereby amended by adding the term First Amendment in the appropriate alphabetical order:
First Amendment means that certain First Amendment to Credit Agreement dated as of July 19, 2012.
2.2 Amendment to Annex I . Annex I is hereby replaced with Annex I to this First Amendment.
Section 3. Increase in Commitments . The Majority Lenders, the Administrative Agent and the Borrower hereby agree as follows, as of the First Amendment Effective Date:
(a) the Aggregate Maximum Credit Amount is increased from $800,000,000 to $1,000,000,000, and
(b) each Lender (each an Increasing Lender ) has increased its Maximum Credit Amount to the amount set forth opposite its name on Annex I.
The Administrative Agent and the Borrower hereby consent to each Increasing Lender increasing its Maximum Credit Amount. On the First Amendment Effective Date, the Maximum Credit Amount of each Lender shall be as set forth on Annex I of this First Amendment.
Section 4. Conditions Precedent . This First Amendment shall become effective on the date, on or before July 31, 2012 (such date, the First Amendment Effective Date ), when each of the following conditions is satisfied (or waived in accordance with Section 12.02):
4.1 The Administrative Agent shall have received (a) all fees and other amounts due and payable on or prior to the First Amendment Effective Date including upfront fees due to each Increasing Lender in an amount equal to 0.40% of the excess of such Increasing Lenders Maximum Credit Amount on the First Amendment Effective Date over such Persons Maximum Credit Amount immediately preceding the First Amendment Effective Date and all other fees the Borrower has agreed to pay in connection with this First Amendment and (b) to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.
4.2 The Administrative Agent shall have received from each Increasing Lender and the Majority Lenders and the Borrower, counterparts (in such number as may be requested by the Administrative Agent) of this First Amendment signed on behalf of such Person.
4.3 To the extent requested by a Increasing Lender with a change in its Maximum Credit Amount, the Administrative Agent shall have received duly executed Notes payable to each such Lender in a principal amount equal to its Maximum Credit Amount dated as of the First Amendment Effective Date.
4.4 The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower and each Guarantor setting forth (a) resolutions of its board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver this First Amendment and to enter into the transactions contemplated in those documents, (b) the officers of the Borrower or such Guarantor (i) who are authorized to sign this First Amendment and (ii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with the Credit Agreement and the transactions contemplated hereby, (c) specimen signatures of such authorized officers, and (d) that there have
been no changes to the Organizational Documents of the Borrower and such Guarantor since July 14, 2011 (or if there have been any changes, attaching copies, certified as being true and complete of the related documents). The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.
4.5 The Administrative Agent shall have received an opinion of Bryan Cave LLP, special counsel to the Borrower, in form and substance reasonably satisfactory to it.
4.6 No Default shall have occurred and be continuing as of the date hereof, after giving effect to the terms of this First Amendment.
The Administrative Agent is hereby authorized and directed to declare this First Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of such conditions as permitted in Section 12.02. Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.
Section 5. Miscellaneous .
5.1 Confirmation . The provisions of the Credit Agreement, as amended by this First Amendment, shall remain in full force and effect following the effectiveness of this First Amendment.
5.2 Ratification and Affirmation; Representations and Warranties . Each of the Borrower and the Guarantors hereby (a) acknowledges the terms of this First Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby and (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this First Amendment:
(i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (except those which have a materiality qualifier, which shall be true and correct as so qualified), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date,
(ii) no Default or Event of Default has occurred and is continuing, and
(iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
5.3 Loan Document . This First Amendment is a Loan Document.
5.4 Counterparts . This First Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this First
Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
5.5 NO ORAL AGREEMENT . THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
5.6 GOVERNING LAW . THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5.7 Payment of Expenses . In accordance with Section 12.03, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of- pocket costs and reasonable expenses incurred in connection with this First Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
5.8 Severability . Any provision of this First Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
5.9 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[SIGNATURES BEGIN NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first written above.
BORROWER: |
CIMAREX ENERGY CO. |
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By: |
/s/ Paul Korus |
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Paul Korus |
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Senior Vice President and |
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Chief Financial Officer |
[Signature Page to First Amendment to Credit Agreement]
GUARANTORS: |
KEY PRODUCTION COMPANY, INC. |
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MAGNUM HUNTER PRODUCTION, INC. |
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CIMAREX GAS GATHERING, INC. |
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CONMAG ENERGY CORPORATION |
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CIMAREX ENERGY CO. OF COLORADO |
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OKLAHOMA GAS PROCESSING, INC. |
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PRIZE ENERGY RESOURCES, INC. |
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By: |
/s/ Sherri M. Nitta |
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Sherri M. Nitta |
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Treasurer |
[Signature Page to First Amendment to Credit Agreement]
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JPMORGAN CHASE BANK, N.A. , |
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as Administrative Agent |
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By: |
/s/ David Morris |
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Name: |
David Morris |
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Title: |
Authorized Officer |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
JPMORGAN CHASE BANK, N.A. |
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By: |
/s/ David Morris |
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Name: |
David Morris |
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Title: |
Authorized Officer |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
COMPASS BANK |
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By: |
/s/ James Neblett |
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Name: |
James Neblett |
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Title: |
Associate |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
DEUTSCHE BANK TRUST COMPANY AMERICAS |
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By: |
/s/ Courtney E. Meehan |
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Name: |
Courtney E. Meehan |
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Title: |
Vice President |
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By: |
/s/ Michael Getz |
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Name: |
Michael Getz |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
UNION BANK, N.A. |
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By: |
/s/ Zachary Holly |
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Name: |
Zachary Holly |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
WELLS FARGO BANK, N.A. |
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By: |
/s/ Sarah Thomas |
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Name: |
Sarah Thomas |
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Title: |
Portfolio Manager |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
BRANCH BANKING AND TRUST COMPANY |
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By: |
/s/ Parul June |
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Name: |
Parul June |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
CAPITAL ONE, N.A. |
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By: |
/s/ Wesley Fontana |
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Name: |
Wesley Fontana |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
CIBC INC. |
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By: |
/s/ Trudy Nelson |
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Name: |
Trudy Nelson |
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Title: |
Authorized Signatory |
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By: |
/s/ Richard Antl |
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Name: |
Richard Antl |
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Title: |
Authorized Signatory |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
COMERICA BANK |
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By: |
/s/ Justin Crawford |
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Name: |
Justin Crawford |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
KEYBANK NATIONAL ASSOCIATION |
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By: |
/s/ Paul J. Pace |
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Name: |
Paul J. Pace |
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Title: |
Senior Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
U.S. BANK NATIONAL ASSOCIATION |
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By: |
/s/ Bruce E. Hernandez |
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Name: |
Bruce E. Hernandez |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
BOKF, N.A., D/B/A BANK OF OKLAHAOMA |
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By: |
/s/ Michael M. Logan |
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Name: |
Michael M. Logan |
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Title: |
Senior Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
BANK OF SCOTLAND PLC |
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By: |
/s/ Karen Weich |
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Name: |
Karen Weich |
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Title: |
Vice President |
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[Signature Page to First Amendment to Credit Agreement]
LENDER: |
ING CAPITAL LLC |
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By: |
/s/ Charles Hall |
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Name: |
Charles Hall |
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Title: |
Managing Director |
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[Signature Page to First Amendment to Credit Agreement]
ANNEX I
LIST OF MAXIMUM CREDIT AMOUNTS
Name of Lender |
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Applicable
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Maximum Credit Amount |
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JPMorgan Chase Bank, N.A. |
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87,500,000 |
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Compass Bank |
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87,500,000 |
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Deutsche Bank Trust Company Americas |
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87,500,000 |
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Union Bank, N.A. |
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87,500,000 |
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Wells Fargo Bank, N.A. |
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87,500,000 |
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Branch Banking and Trust Company |
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68,750,000 |
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Capital One, N.A. |
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68,750,000 |
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CIBC Inc. |
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68,750,000 |
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Comerica Bank |
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68,750,000 |
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KeyBank National Association |
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68,750,000 |
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U.S. Bank National Association |
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68,750,000 |
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BOKF, N.A., d/b/a Bank of Oklahoma |
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50,000,000 |
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Bank of Scotland plc |
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50,000,000 |
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ING Capital LLC |
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50,000,000 |
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TOTAL |
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100.0000 |
% |
$ |
1,000,000,000.00 |
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Exhibit 10.2
SECOND AMENDMENT
TO
CREDIT AGREEMENT
DATED AS OF MAY 1, 2014
AMONG
CIMAREX ENERGY CO.,
AS BORROWER,
THE GUARANTORS,
JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT,
AND
THE LENDERS PARTY HERETO
J.P. MORGAN SECURITIES LLC,
as Sole Bookrunner
J.P. MORGAN SECURITIES LLC and WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this Second Amendment ) dated as of May 1, 2014, is among CIMAREX ENERGY CO. , a Delaware corporation (the Borrower ), the Guarantors signatory hereto, each of the lenders party to the Credit Agreement referred to below (collectively, the Lenders ), and JPMORGAN CHASE BANK, N.A. , as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the Administrative Agent ).
R E C I T A L S
A. The Borrower, the Administrative Agent, the Lenders and the other Agents party thereto are parties to that certain Credit Agreement dated as of July 14, 2011, as amended by that certain First Amendment to Credit Agreement dated as of July 19, 2012 (as further amended, restated, modified or supplemented, the Credit Agreement ), pursuant to which the Lenders have made certain credit and other financial accommodations available to and on behalf of the Borrower and its Subsidiaries.
B. The Borrower has requested and the Administrative Agent and the Lenders have agreed to amend certain provisions of the Credit Agreement.
C. Now, therefore, to induce the Administrative Agent and the Lenders to enter into this Second Amendment and in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms . Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this Second Amendment. Unless otherwise indicated, all section references in this Second Amendment refer to sections of the Credit Agreement.
Section 2. Amendments to Credit Agreement .
2.1 Amendments to Section 1.02 .
(a) The definition of Agreement is hereby amended to read as follows:
Agreement means this Credit Agreement, as amended by that certain First Amendment and that certain Second Amendment, and as the same may from time to time be further amended, modified, supplemented or restated.
(b) The definition of Applicable Margin is hereby amended by replacing the Applicable Margin Grid in respect of such definition with the following Applicable Margin Grid:
Applicable Margin Grid
Leverage Ratio |
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< 1.0 |
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>
1.0, but
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>
2.0, but
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> 3.0 |
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ABR Loans |
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0.50 |
% |
0.75 |
% |
1.00 |
% |
1.25 |
% |
Eurodollar Loans |
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1.50 |
% |
1.75 |
% |
2.00 |
% |
2.25 |
% |
(c) The definition of Krug Litigation is hereby amended to read as follows:
Krug Litigation means the lawsuit filed in the Tulsa County District Court in the matter H.B. Krug et. al. vs. Helmerich & Payne, Inc ., and the judgment rendered against the Borrower (having assumed the liabilities of Helmerich & Payne, Inc.), which is further described on Schedule 7.05.
(d) The definition of Maturity Date is hereby amended to read as follows:
Maturity Date means July 14, 2018.
(e) Section 1.02 is hereby amended by adding the term Second Amendment in the appropriate alphabetical order:
Second Amendment means that certain Second Amendment to Credit Agreement dated as of May 1, 2014.
2.2 Amendment to Section 3.05(a) . Section 3.05(a) is hereby amended by replacing the Commitment Fee Grid therein with the following Commitment Fee Grid:
Commitment Fee Grid
Leverage Ratio |
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< 1.0 |
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< 2.0 |
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<3.0 |
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Commitment Fee |
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0.300 |
% |
0.375 |
% |
.50 |
% |
2.3 Amendments to Schedules .
(a) Schedule 1.01 is hereby amended by replacing it with Schedule 1.01 to this Second Amendment.
(b) Schedule 7.05 is hereby amended by replacing it with Schedule 7.05 to this Second Amendment.
(c) Schedule 7.13 is hereby amended by replacing it with Schedule 7.13 to this Second Amendment.
(d) Schedule 7.18 is hereby amended by replacing it with Schedule 7.18 to this Second Amendment.
Section 3. Borrowing Base . From and after the Second Amendment Effective Date, the Borrowing Base shall be, and hereby is, equal to the amount of $2,500,000,000, which Borrowing Base shall remain in effect until the next Scheduled Redetermination or the Borrowing Base is otherwise redetermined or adjusted in accordance with the Credit Agreement. Notwithstanding the foregoing, the Borrowing Base may be subject to further adjustments from time to time pursuant to Section 2.07(e) or Section 9.10. Each of the Borrower, on the one hand, and the Administrative Agent and the Lenders, on the other hand, agree that the redetermination of the Borrowing Base pursuant to this Section 3 shall constitute a Scheduled Redetermination. This Section 3 constitutes notice of the redetermined Borrowing Base in accordance with Section 2.07(d) of the Credit Agreement.
Section 4. Conditions Precedent . This Second Amendment shall become effective on the date, on or before May 1, 2014 (such date, the Second Amendment Effective Date ), when each of the following conditions is satisfied (or waived in accordance with Section 12.02):
4.1 The Administrative Agent shall have received (a) all fees and other amounts due and payable on or prior to the Second Amendment Effective Date including upfront fees due to each Lender (i) in an amount equal to 0.20%, with such fee being paid on the lesser of (A) each approving Lenders final allocated share of the Aggregate Maximum Credit Amount immediately prior to the Second Amendment Effective Date and (B) each approving Lenders final allocated share of the Aggregate Maximum Credit Amount on the Second Amendment Effective Date and (ii) in an amount equal to the product of 0.40% and the amount by which the Maximum Credit Amount of each Lender on the Second Amendment Effective Date exceeds its Maximum Credit Amount immediately prior to the Second Amendment Effective Date, and all other fees the Borrower has agreed to pay in connection with this Second Amendment and (b) to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.
4.2 The Administrative Agent shall have received from each Lender and the Borrower, counterparts (in such number as may be requested by the Administrative Agent) of this Second Amendment signed on behalf of such Person.
4.3 To the extent requested by a Lender with an increase in its Maximum Credit Amount, the Administrative Agent shall have received duly executed Notes payable to each such Lender in a principal amount equal to its Maximum Credit Amount dated as of the Second Amendment Effective Date.
4.4 The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower and each Guarantor setting forth (a) resolutions of its board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver this Second Amendment and to enter into the transactions contemplated in those documents, (b) the officers of the Borrower or such Guarantor (i) who are authorized to sign this Second Amendment and (ii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with the Credit Agreement and the transactions contemplated hereby, (c) specimen signatures of such authorized officers, and (d)
that there have been no changes to the Organizational Documents of the Borrower and such Guarantor since July 19, 2012 (or if there have been any changes, attaching copies, certified as being true and complete of the related documents). The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.
4.5 No Default shall have occurred and be continuing as of the date hereof, after giving effect to the terms of this Second Amendment.
The Administrative Agent is hereby authorized and directed to declare this Second Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of such conditions as permitted in Section 12.02. Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.
Section 5. Miscellaneous .
5.1 Confirmation . The provisions of the Credit Agreement, as amended by this Second Amendment, shall remain in full force and effect following the effectiveness of this Second Amendment.
5.2 Ratification and Affirmation; Representations and Warranties . Each of the Borrower and the Guarantors hereby (a) acknowledges the terms of this Second Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby and (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Second Amendment:
(i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (except those which have a materiality qualifier, which shall be true and correct as so qualified), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date,
(ii) no Default or Event of Default has occurred and is continuing, and
(iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
5.3 Loan Document . This Second Amendment is a Loan Document.
5.4 Counterparts . This Second Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Second Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
5.5 NO ORAL AGREEMENT . THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
5.6 GOVERNING LAW . THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5.7 Payment of Expenses . In accordance with Section 12.03, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of- pocket costs and reasonable expenses incurred in connection with this Second Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
5.8 Severability . Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
5.9 Successors and Assigns . This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[SIGNATURES BEGIN NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed as of the date first written above.
BORROWER: |
CIMAREX ENERGY CO. |
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By: |
/s/ Paul Korus |
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Paul Korus |
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Senior Vice President and |
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Chief Financial Officer |
GUARANTORS: |
KEY PRODUCTION COMPANY, INC. |
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MAGNUM HUNTER PRODUCTION, INC. |
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CIMAREX GAS GATHERING, INC. |
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CONMAG ENERGY CORPORATION |
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CIMAREX ENERGY CO. OF COLORADO |
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OKLAHOMA GAS PROCESSING, INC. |
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PRIZE ENERGY RESOURCES, INC. |
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By: |
/s/ Paul Korus |
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Paul Korus |
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Senior Vice President and |
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Chief Financial Officer |
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JPMORGAN CHASE BANK, N.A. , |
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as Administrative Agent |
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By: |
/s/ David Morris |
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Name: |
David Morris |
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Title: |
Authorized Officer |
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LENDER: |
JPMORGAN CHASE BANK, N.A. |
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By: |
/s/ David Morris |
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Name: |
David Morris |
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Title: |
Authorized Officer |
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LENDER: |
COMPASS BANK |
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By: |
/s/ James Neblett |
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Name: |
James Neblett |
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Title: |
Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
DEUTSCHE BANK TRUST COMPANY AMERICAS |
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as Lender |
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By: |
/s/ Michael Getz |
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Name: |
Michael Getz |
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Title: |
Vice President |
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By: |
/s/ Michael Winters |
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Name: |
Michael Winters |
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Title: |
Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
UNION BANK, N.A. |
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By: |
/s/ Brian Hawk |
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Name: |
Brian Hawk |
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Title: |
Assistant Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
WELLS FARGO BANK, N.A. |
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By: |
/s/ Tim Green |
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Name: |
Tim Green |
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Title: |
Director |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
BRANCH BANKING AND TRUST COMPANY |
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By: |
/s/ Traci Bankston |
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Name: |
Traci Bankston |
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Title: |
Assistant Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
CAPITAL ONE, N.A. |
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By: |
/s/ Nancy M. Mak |
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Name: |
Nancy M. Mak |
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Title: |
Senior Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
CIBC INC. |
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By: |
/s/ Daria Mahoney |
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Name: |
Daria Mahoney |
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Title: |
Authorized Signatory |
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By: |
/s/ Trudy Nelson |
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Name: |
Trudy Nelson |
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Title: |
Authorized Signatory |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
COMERICA BANK |
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By: |
/s/ Devin S. Eaton |
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Name: |
Devin S. Eaton |
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Title: |
Corporate Banking Officer |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
KEYBANK NATIONAL ASSOCIATION |
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By: |
/s/ John Dravenstott |
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Name: |
John Dravenstott |
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Title: |
Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
U.S. BANK NATIONAL ASSOCIATION |
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By: |
/s/ Nicholas T. Hanford |
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Name: |
Nicholas T. Hanford |
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Title: |
Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
BOKF, N.A., D/B/A BANK OF OKLAHAOMA |
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By: |
/s/ Michael M. Logan |
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Name: |
Michael M. Logan |
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Title: |
Senior Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
SANTANDER BANK, N.A. |
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By: |
/s/ Vaughn Buck |
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Name: |
Vaughn Buck |
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Title: |
Executive Vice President |
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By: |
/s/ Puiki Lock |
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Name: |
Puiki Lock |
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Title: |
Vice President |
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[Signature Page to Second Amendment to Credit Agreement]
LENDER: |
ING CAPITAL LLC |
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By: |
/s/ Charles Hall |
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Name: |
Charles Hall |
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Title: |
Managing Director |
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By: |
/s/ Josh Strong |
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Name: |
Josh Strong |
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Title: |
Director |
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[Signature Page to Second Amendment to Credit Agreement]
SCHEDULE 1.01
EXISTING LETTERS OF CREDIT
Beneficiary |
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LC Amount |
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Current Expiry Date |
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Notes |
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Chevron U.S.A. Inc. |
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$ |
2,500,000 |
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Ongoing till wells are P&A |
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Covers P&A liability |
Florida Gas Transmission Company |
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$ |
50,000 |
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5/9/2014 (Note: will be renewed) |
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Tariff requirement |
SCHEDULE 7.05
LITIGATION
In January 2009, the Tulsa County District Court issued a judgment totaling $119.6 million in the H.B. Krug, et al. v. Helmerich & Payne, Inc. (H&P) case. This lawsuit originally was filed in 1998 and addressed H&Ps conduct pertaining to a 1989 take-or-pay settlement, along with potential drainage and other related issues. Pursuant to the 2002 spin-off of H&P, Borrower assumed the assets and liabilities of H&Ps exploration and production business, including this lawsuit. In 2009, we recorded a litigation expense of $119.6 million plus additional post-judgment interest and costs after the trial court entered a final judgment for these amounts
On December 10, 2013 the Oklahoma Supreme Court reversed the trial courts original judgment of $119.6 million and affirmed an alternative jury verdict for $3.65 million. In light of the Oklahoma Supreme Courts ruling, on December 31, 2013, Borrower reduced previously recognized litigation expense and the associated long-term liability by $142.8 million.
On March 14, 2014, after denying the Plaintiffs Petition for Rehearing, the Oklahoma Supreme Court remanded the matter back to the trial court. On March 31, 2014, the trial court entered a final Judgment on Remand for damages of $3.65 million and post-judgment interest, and Borrower wired $15.8 million to Plaintiffs trust account in satisfaction of the judgment plus post-judgment interest and in satisfaction of the payment in lieu of bond. The only issues that now remain are what amounts, if any, Plaintiffs are entitled to receive regarding prejudgment interest, attorneys fees and costs. On April 4, 2014, Borrower filed a motion asking the trial court to rule Plaintiffs are not entitled to any attorneys fees or prejudgment interest. The outcome of these remaining issues cannot be determined at this time. Our current assessments and estimates likely will change in the future as a result of subsequent legal proceedings both in the trial court and on appeal.
SCHEDULE 7.13
SUBSIDIARIES AND PARTNERSHIPS
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% Owned |
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Directly or |
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Jurisdiction of |
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Subsidiaries/Partnerships* |
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Type of Entity |
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Indirectly** |
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Organization |
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Guarantor |
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Key Production Company, Inc. |
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Corp |
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100 |
% |
Delaware |
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Yes |
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Cimarex Energy Co. of Colorado |
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Corp |
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100 |
% |
Texas |
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Yes |
(fka Gruy Petroleum Management, Co.) |
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Magnum Hunter Production, Inc. |
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Corp |
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100 |
% |
Texas |
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Yes |
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Conmag Energy Corporation |
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Corp |
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100 |
% |
Texas |
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Yes |
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Cimarex Gas Gathering, Inc. |
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Corp |
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100 |
% |
Texas |
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Yes |
(fka Hunter Gas Gathering, Inc.) |
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Prize Energy Resources, Inc. |
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Corp |
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100 |
% |
Delaware |
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Yes |
(fka Prize Energy Resources, L.P.) |
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Hunter Resources, Inc. |
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Corp |
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100 |
% |
Pennsylvania |
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No |
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Oklahoma Gas Processing, Inc. |
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Corp |
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100 |
% |
Delaware |
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No |
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Inesco Corporation |
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Corp |
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100 |
% |
Texas |
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No |
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Bruin Exploration, LLC |
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LLC |
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100 |
% |
Kentucky |
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No |
*Principal place of business and chief executive office for all subsidiaries is:
1700 Lincoln Street, Ste. 1800
Denver, CO 80203-4518
**Subsidiaries owned directly by Cimarex Energy Co. are in bold type
SCHEDULE 7.18
SWAP AGREEMENTS
Complete List as of December 31, 2013
Counter Party |
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Period |
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Type |
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Index |
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Volume |
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Volume/Dav |
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Floor |
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Ceiling |
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MTM |
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Oil Hedges - 2014 |
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CIBC |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
105.55 |
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$ |
258,352.00 |
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CIBC |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
101.00 |
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$ |
(110,683.00 |
) |
CIBC |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
101.00 |
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$ |
(110,683.00 |
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Deutsche Bank |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
106.50 |
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$ |
311,999.44 |
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JP Morgan |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
105.00 |
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$ |
239,079.10 |
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JP Morgan |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
104.75 |
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$ |
224,092.42 |
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JP Morgan |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
101.00 |
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$ |
(99,843.44 |
) |
Union Bank |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
106.50 |
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$ |
309,604.00 |
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Union Bank |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
102.30 |
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$ |
21,432.00 |
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Wells Fargo Bank |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
105.75 |
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$ |
283,781.79 |
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Wells Fargo Bank |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
101.00 |
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$ |
(95,742.97 |
) |
Wells Fargo Bank |
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Jan 14 - Dec 14 |
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Collar |
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WTI |
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365,000 Bbls |
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1,000 Bbls |
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$ |
85.00 |
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$ |
101.25 |
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$ |
(67,300.93 |
) |
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4,380,000 Bbls |
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$ |
1,164,087.41 |
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||
Gas Hedges - 2014 |
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Deutsche Bank |
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Jan 14 - Dec 14 |
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Collar |
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PEPL |
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3,650,000 MMBtu |
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10,000 MMBtu |
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$ |
3.50 |
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$ |
4.60 |
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$ |
295,089.65 |
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Deutsche Bank |
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Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
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3,650,000 MMBtu |
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10,000 MMBtu |
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$ |
3.50 |
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$ |
4.60 |
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$ |
295,089,65 |
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JP Morgan |
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Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
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3,650,000 MMBtu |
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10,000 MMBtu |
|
$ |
3.50 |
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$ |
4.50 |
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$ |
259,705,17 |
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JP Morgan |
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Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
|
3,650,000 MMBtu |
|
10,000 MMBtu |
|
$ |
3 50 |
|
$ |
4.50 |
|
$ |
259,705.17 |
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JP Morgan |
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Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
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3,650,000 MMBtu |
|
10,000 MMBtu |
|
$ |
3 50 |
|
$ |
4.50 |
|
$ |
259,705.17 |
|
JP Morgan |
|
Jan 14 - Dec 14 |
|
Collar |
|
El Paso |
|
7,300,000 MMBtu |
|
20,000 MMBtu |
|
$ |
3 65 |
|
$ |
4.50 |
|
$ |
120,814.69 |
|
Wells Fargo Bank |
|
Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
|
3,650,000 MMBtu |
|
10,000 MMBtu |
|
$ |
3.50 |
|
$ |
4.60 |
|
$ |
264,525.96 |
|
Wells Fargo Bank |
|
Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
|
3,650,000 MMBtu |
|
10,000 MMBtu |
|
$ |
3.50 |
|
$ |
4.60 |
|
$ |
264,525.96 |
|
Wells Fargo Bank |
|
Jan 14 - Dec 14 |
|
Collar |
|
PEPL |
|
3,650,000 MMBtu |
|
10,000 MMBtu |
|
$ |
3.57 |
|
$ |
4.65 |
|
$ |
371,969.30 |
|
Wells Fargo Bank |
|
Feb 14 - Dec 14 |
|
Collar |
|
El Paso |
|
3,650,000 MMBtu |
|
10,000 MMBtu |
|
$ |
3.65 |
|
$ |
4.50 |
|
$ |
50,724 06 |
|
|
|
|
|
|
|
|
|
40,150,000 MMBtu |
|
|
|
|
|
|
|
$ |
2,441,854.78 |
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