6. Long-Term Debt

Long-term debt consisted of the following at June 30, 2013 and December 31, 2012:



	June 30, 2013			December 31, 2012
	(In thousands)
8.625% Senior Notes	$	600,000		$	600,000
Unamortized discount for 8.625% Senior Notes	(4,521		)	(4,849		)
7.50% Senior Notes	300,000			300,000
4.375% Convertible Senior Notes	4,425			73,750
Unamortized discount for 4.375% Convertible Senior Notes	—			(1,093		)
Senior Secured Revolving Credit Facility	28,000			—
	$	927,904		$	967,808

Convertible Senior Notes

On June 3, 2013, the Company completed a required tender offer to repurchase the 4.375% convertible senior notes due 2028, at par plus accrued but unpaid interest to but excluding June 1, 2013, for aggregate consideration of $69.3 million (approximately 94% of the convertible senior notes outstanding prior to the tender offer). Each holder received $1,000 for each $1,000 principal amount of convertible senior notes repurchased in the tender offer. Due to the Company repurchasing the convertible senior notes on June 1, 2013, which is the date the semi-annual interest payment was due and after the record date, the Company paid only the regular interest payment as there was no accrued or unpaid interest due as part of the repurchase price. As of June 30, 2013, $4.4 million aggregate principal amount of convertible senior notes remained outstanding. The holders of our remaining $4.4 million aggregate principal amount of convertible senior notes may require us to repurchase the remaining notes on June 1, 2018 and 2023, or upon a fundamental corporate change at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased plus accrued and unpaid interest, if any. We may also redeem notes at any time at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest, if any.

Senior Secured Revolving Credit Facility

The Company is party to a senior secured revolving credit facility with Wells Fargo Bank, National Association as the administrative agent. The revolving credit facility provides for a borrowing capacity up to the lesser of (i) the borrowing base (as defined in the senior credit agreement governing the revolving credit facility) and (ii) $750.0 million. The revolving credit facility matures on January 27, 2016. The revolving credit facility is secured by substantially all of the Company’s U.S. assets and is guaranteed by all of the Company’s existing subsidiaries (other than Monument Exploration LLC, Carrizo UK Bardolph Ltd, and Carrizo (Permian) LLC).

As a result of the Spring 2013 borrowing base redetermination, effective April 29, 2013, the borrowing base was increased to $530.0 million from $365.0 million after considering the addition of proved reserves as a result of the Company’s successful ongoing drilling program. The borrowing base will be redetermined by the lenders at least semi-annually, generally on each May 1 and November 1, with the next redetermination expected in the Fall of 2013. The amount the Company is able to borrow with respect to the borrowing base is subject to compliance with the financial covenants and other provisions of the credit agreement governing the revolving credit facility.

The Company is subject to certain covenants under the terms of the revolving credit facility which include the maintenance of the following financial covenants: (1) a ratio of Total Debt to EBITDA of not more than 4.00 to 1.00; (2) a Current Ratio of not less than 1.00 to 1.00; (3) a ratio of Senior Debt to EBITDA of not more than 2.50 to 1.00; and (4) a ratio of EBITDA to Interest Expense of not less than 2.50 to 1.00 (each of the capitalized terms used in the foregoing clauses (1) through (4) being as defined in the credit agreement governing the revolving credit facility). At June 30, 2013, the ratio of Total Debt to EBITDA was 2.50 to 1.00, the Current Ratio was 1.83 to 1.00, the ratio of Senior Debt to EBITDA was 0.07 to 1.00 and the ratio of EBITDA to Interest Expense was 5.31 to 1.00. Total Debt and Senior Debt, as defined in the credit agreement governing the revolving credit facility, are net of cash and cash equivalents of the Company. Because the calculation of the financial ratios are made as of a certain date, the financial ratios can fluctuate significantly period to period as the amounts outstanding under the revolving credit facility are dependent on the timing of cash flows related to operations, capital expenditures, sales of oil and gas properties and securities offerings.

At June 30, 2013, the Company had $28.0 million of borrowings outstanding under the revolving credit facility with a weighted average interest rate of 2.19%. At June 30, 2013, the Company also had $0.9 million in letters of credit outstanding which reduced the amounts available under the revolving credit facility. Future availability under the $530.0 million borrowing base is subject to the terms and covenants of the revolving credit facility. The revolving credit facility is generally used to fund ongoing working capital needs and the remainder of the Company’s capital expenditure plan to the extent such amounts exceed the cash flow from operations, proceeds from the sale of oil and gas properties and securities offerings.