UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 2014
Black Ridge Oil & Gas, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
| 000-53952 | 27-2345075 |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
| 10275 Wayzata Boulevard, Suite 100, Minnetonka, Minnesota | 55305 |
| (Address of principal executive offices) | (Zip Code) |
| (952) 426-1241 | |
| (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.
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR240.14d-2(b)) |
| o | Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c) |
Item 1.01 Entry into a Material Definitive Agreement.
On April 21, 2014, Black Ridge Oil & Gas, Inc., a Nevada corporation (the “Company”), entered into an amendment (the “Amendment”) to the Credit Agreement dated August 8, 2013, by and between the Company and Cadence Bank, N.A., a national banking association (the “Bank”) (“Senior Credit Facility”). The Amendment increases the borrowing base amount from $18,000,000 to $20,000,000. The foregoing description of the Amendment to the Credit Agreement is a summary only and is qualified in its entirety by reference to the Third Amendment to Credit Agreement, attached hereto as Exhibit 10.1, which is incorporated herein by reference.
On April 21, 2014, Chambers Energy Management, LP, as administrative agent (“Chambers”), and several other lenders under the Company’s Second Lien Credit Agreement dated August 8, 2013 (the “Subordinated Credit Facility”) consented to an increase in the available commitments under the Subordinated Credit Facility in the amount of $5,000,000 to a total current available commitment of $30,000,000 (the “Subordinated Credit Facility Consent”). The Subordinated Credit Facility provides for a total of $75,000,000, with the additional $45,000,000 available upon the consent of Chambers. In addition, the Subordinated Credit Facility Consent changes the reference to the amount under the First Lien Carve Out from $18,000,000 to $20,000,000. The foregoing description of the Subordinated Credit Facility Consent is a summary only and is qualified in its entirety by reference to the Consent to Second Lien Credit Agreement, attached hereto as Exhibit 10.2, which is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On April 23, 2014, the Company issued a press release regarding the Amendment and Subordinated Credit Facility Consent and certain other information. A copy of the press release is being furnished pursuant to Regulation FD as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in the press release and this Item 7.01 shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Furthermore, the press release shall not be deemed to be incorporated by reference into the Company's filings under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as set forth with respect thereto in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 10.1 | Third Amendment to Credit Agreement, dated April 21, 2014 by and between Black Ridge Oil & Gas, Inc., as Borrower, and Cadence Bank, N.A., as Lender. |
| 10.2 | Consent Related to Second Lien Credit Agreement, dated April 21, 2014, provided by Chambers Energy Management, LP, as Administrative Agent, and the several other lenders. |
| 99.1 | Press release (furnished). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BLACK RIDGE OIL & GAS, INC.
(Registrant)
Date: April 23, 2014
/s/ James Moe, Chief Financial Officer
James Moe, Chief Financial Officer
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Exhibit 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”) is dated and effective as of April 21, 2014 (the “Effective Date”), by and between BLACK RIDGE OIL & GAS, INC., a Nevada corporation (the “Borrower”), and CADENCE BANK, N.A., a national banking association (the “Lender”).
R E C I T A L S:
1. The Borrower and the Lender have heretofore entered into a Credit Agreement dated as of August 8, 2013, as amended by that certain First Amendment to Credit Agreement dated as of December 13, 2013, and as further amended by that certain Second Amendment to Credit Agreement dated as of March 24, 2014 (as amended, the “Agreement”), pursuant to which the Lender established in favor of the Borrower certain credit facilities and loans.
2. The Borrower has requested that the Lender increase the Borrowing Base Amount under the Agreement, and the Lender, subject to the terms and conditions hereof, has agreed to honor the Borrower’s request.
NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants hereinafter set forth and intending to be legally bound hereby, do hereby further amend the Agreement and agree as follows:
A. Defined Terms. Capitalized terms used herein which are defined in the Agreement are used herein with such defined meanings, as said definitions may be amended by this Third Amendment.
| 1. | The following new definition is hereby added to Section 1.1 of the Agreement: | |
| “Third Amendment” means that certain Third Amendment to Credit Agreement by and between Black Ridge Oil & Gas, Inc. and Cadence Bank, N.A., dated April 21, 2014. |
| 2. | The definition of “Mortgage” in the Agreement is hereby deleted in its entirety and replaced with the following: | |
| “Mortgage” shall individually, collectively, and interchangeably mean (a) that certain Mortgage, Line of Credit Mortgage, Multiple Indebtedness Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement by Borrower in favor of Lender dated August, 8, 2013 affecting certain of Borrower’s mineral interests in North Dakota, as the same may be amended, supplemented, consolidated and/or restated from time to time and in effect; (b) that certain Mortgage, Line of Credit Mortgage, Multiple Indebtedness Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement by Borrower in favor of Lender dated August 8, 2013 affecting Borrower’s mineral interests in Montana, as the same may be amended, supplemented, consolidated, and/or restated from time to time and in effect; (c) that certain Mortgage, Line of Credit Mortgage, Multiple Indebtedness Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement by Borrower in favor of Lender dated December 13, 2013 affecting certain of Borrower’s mineral interests in North Dakota, as the same may be amended, supplemented, consolidated and/or restated from time to time and in effect; and (d) any and all mortgages, security agreements, and/or deeds of trust executed after the date of this Agreement by Borrower (or any other Person) as security for the Indebtedness, as the same may be amended, supplemented, consolidated, and/or restated from time to time and in effect. |
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B. Increase to Borrowing Base Amount. Subject to the terms and conditions of the Agreement, as amended by this Third Amendment, and in accordance with Section 2.2 of the Agreement, the Lender hereby increases the Borrowing Base Amount from $18,000,000 to $20,000,000. This increase shall satisfy the requirement in Section 2.2 of the Agreement that Lender re-evaluate and re-establish the Borrowing Base Amount on April 1, 2014.
C. Conditions Precedent. The effectiveness of this Third Amendment shall be subject to the Lender’s satisfactory receipt of (i) a signed original of this Third Amendment by Borrower, (ii) a signed original of the Second Amendment to Intercreditor Agreement between the Lender and Chambers Energy Management, L.P., (iii) copies of all other documents, instruments and certificates which the Lender or its counsel may reasonably request in connection herewith, and (iv) all fees, charges and expenses which are due and payable under this Third Amendment. Lender reserves the right, in its sole discretion, to waive any one or more of the foregoing conditions precedent.
D. Representations; No Default. On and as of the date of this Third Amendment, and after giving effect to this Third Amendment, the Borrower confirms, reaffirms, and restates the representations and warranties set forth in the Agreement and the Loan Documents; provided, that each reference to the Agreement herein shall be deemed to include the Agreement as amended by this Third Amendment.
E. Confirmation of Collateral Documents. All of the liens, privileges, priorities and equities existing and to exist under and in accordance with the terms of the Loan Documents are hereby renewed, extended and carried forward as security for all of the Loans and all other debts, obligations and liabilities of the Borrower to Lender. More specifically, the Borrower hereby acknowledges and confirms that the Mortgage and Security Agreement secure all present and future indebtedness of Borrower to Lender, including without limitation all of the Loans. Further, the parties to this Third Amendment acknowledge that all Loans are cross-defaulted and cross-secured.
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F. Payment of Expenses.
(a) Concurrently with the execution of this Third Amendment, Borrower agrees to pay a facility fee in the amount of $18,000.00, in accordance with Section 5.1 of the Agreement.
(b) Borrower agrees to pay or reimburse the Lender for all legal fees and expenses of counsel to the Lender in connection with the transactions contemplated by this Third Amendment.
G. Amendments. There are no oral agreements between the Lender and the Borrower. The Agreement, as amended by this Third Amendment and the other Loan Documents, sets forth the entire agreement of the parties with respect to the subject matter hereof and supersede all prior written and oral understandings between the Borrower and the Lender with respect to the matters herein and therein set forth. The Agreement, as amended by this Third Amendment, cannot be modified or amended except by a writing signed and delivered by the Borrower and the Lender.
H. Waiver of Defenses. In consideration of the Lender’s execution of this Third Amendment, the Borrower does hereby irrevocably waive any and all claims and/or defenses to payment on any indebtedness arising under the Agreement and owed by Borrower to the Lender that may exist as of the date of execution of this Third Amendment.
I. Governing Law and Counterparts. This Third Amendment shall be governed by and construed in accordance with the laws of the State of Texas. This Third Amendment may be executed in any number of counterparts, all of which counterparts, when taken together, shall constitute one and the same instrument.
J. Continued Effect. Except as expressly modified herein, the Agreement, as amended by this Third Amendment, shall continue in full force and effect. The Agreement, as amended by this Third Amendment, is hereby ratified and confirmed by the parties hereto.
K. Resolutions/Consents. The Borrower hereby certifies to the Lender that all corporate resolutions previously delivered to Lender in connection with the Agreement remain in effect.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Credit Agreement to be executed and delivered as of the date hereinabove provided by the authorized officers each hereunto duly authorized.
BORROWER: | ||
| BLACK RIDGE OIL & GAS, INC. | ||
| By: | /s/ Ken DeCubellis | |
| Name: Ken DeCubellis Title: Chief Executive Officer | ||
| BANK: | ||
| CADENCE BANK, N.A. | ||
| By: | /s/ Steven Taylor | |
| Name: Steven Taylor | ||
| Title: Vice President | ||
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Exhibit 10.2
CHAMBERS ENERGY CAPITAL
600 Travis Street, Suite 7330
Houston, Texas 77002
April 21, 2014
Black Ridge Oil & Gas, Inc.
10275 Wayzata Blvd., Suite 310
Minnetonka, MN 55305
Attention: Mr. James Moe
Ladies and Gentlemen:
Reference is made to (a) that certain Credit Agreement, dated as of August 8, 2013, among Black Ridge Oil & Gas, Inc., as borrower (the “Borrower”), Chambers Energy Management, LP, as agent (“Agent”), and the lenders party thereto (as amended, supplemented or otherwise modified, the “Credit Agreement”), and (b) that certain letter, dated as of March 7, 2014, by the Borrower to Agent (the “Letter”). Each capitalized term used herein but not defined herein shall have the meaning ascribed to such term in the Credit Agreement.
In the Letter, the Borrower requested that the Lenders increase the Available Commitments in the amount of $5,000,000 (the “Increase”) pursuant to Section 2.2(c) of the Credit Agreement. The undersigned Lenders hereby consent to the Increase. Notwithstanding Section 2.2(c) of the Credit Agreement, the Borrower, the Lenders and Agent agree that the Increase shall be effective as of April 21, 2014.
In addition, the Borrower, the Lenders and Agent hereby agree to make the following amendments to the Credit Agreement:
(a) The definition of “First Lien Carve Out” appearing in Section 1.1 of the Credit Agreement is hereby amended by replacing each reference to “$18,000,000” appearing therein with “$20,000,000”; and
(b) Section 9.2 of the Credit Agreement is hereby amended by changing Agent’s notice information to the following:
| Agent: | Chambers Energy Management, LP | |
| 600 Travis Street, Suite 4700 | ||
| Houston, TX 77002 | ||
| Attention: Robert Finch | ||
| Email: rfinch@chambersenergy.com | ||
| with a copy to (which copy | ||
| shall not constitute notice): | Cortland Capital Market Services LLC | |
| 225 West Washington Street, Suite 2100 | ||
| Chicago, IL 60606 | ||
| Attention: Aslam A.Azeem | ||
| Facsimile: (312) 376-0751 | ||
| Email: aslam.azeem@cortlandglobal.com | ||
| with a copy to (which copy | ||
| shall not constitute notice): | Latham & Watkins LLP | |
| 811 Main Street, Suite 3700 | ||
| Houston, TX 77002 | ||
| Attention: J. Michael Chambers | ||
| Facsimile: (713) 546-5401 | ||
| Email: michael.chambers@lw.com |
[Signature pages follow]
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Very truly yours,.
CHAMBERS ENERGY CAPITAL II, LP,
By: CEC Fund II GP, LLC, as its general partner
as a Lender
By: /s/ J. Robert Chambers
Name: J. Robert Chambers
Title: Managing Director
CHAMBERS ENERGY CAPITAL II TE, LP,
By: CEC Fund II GP, LLC, as its general partner
as a Lender
By: /s/ J. Robert Chambers
Name: J. Robert Chambers
Title: Managing Director
CHAMBERS ENERGY MANAGEMENT, LP
as Agent
By: /s/ J. Robert Chambers
Name: J. Robert Chambers
Title: President and Chief Executive Officer
Acknowledged and Agreed:
BLACK RIDGE OIL & GAS, INC.
By: /s/ Kenneth DeCubellis
Name: Kenneth DeCubellis
Title: Chief Executive Officer
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Exhibit 99.1
Black Ridge Oil & Gas, Inc. Announces Increased Borrowing Base and Credit Availability
MINNETONKA, MN, April 23, 2014 – Black Ridge Oil & Gas, Inc. (the "Company") (OTCQB: ANFC) announced an increase to the borrowing base and availability under its credit facility agreements to $50 million, an increase from $43 million. The increase is largely based on the Company’s December 31, 2013 reserve report, as prepared by Netherland Sewell and Associates, Inc. The previous borrowing base and availability was determined on December 13, 2013, concurrent with the closing of the Company’s previously announced $20.6 million acquisition. The next borrowing base adjustment is scheduled to occur subsequent to a lender review of reserves as of June 30, 2014.
The year-end adjustment includes a $2 million increase, from $18 to $20 million, in the Cadence Bank, N.A. senior secured credit facility and an increase of $5 million, from $25 to $30 million, in the Chambers Energy Management, LP. subordinate term loan. As of March 31, 2014, the Company had drawn $38.9 million from these facilities.
Ken DeCubellis, Black Ridge's CEO, commented, “The $7 million increase in our borrowing base reflects the quality and continued growth of our assets. We plan to use increases in availability under these facilities as well as cash flow from operations to execute and accelerate our growth strategy.”
About the Company
Black Ridge Oil & Gas, Inc. is an oil and gas exploration and production company based in Minnetonka, Minnesota. Black Ridge's focus is exclusive to the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. For additional information, visit the Company's website at www.blackridgeoil.com.
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Contact
Black Ridge Oil & Gas, Inc.
Brenda Blume, Director of Investor and Public Relations
952-582-4303
Ken DeCubellis, Chief Executive Officer
952-426-1241
www.blackridgeoil.com
SOURCE Black Ridge Oil & Gas, Inc.