Debt Obligations

The following table summarizes our debt obligations as of the dates presented:



	As of
	June 30, 2016					December 31, 2015
	Principal			Unamortized Issuance Costs ¹		Principal			Unamortized Issuance Costs
Revolving credit facility ²	$	112,553				$	170,000
Senior notes due 2019	300,000			$	—	300,000			$	3,295
Senior notes due 2020	775,000			—		775,000			17,322
Totals	1,187,553			$	—	1,245,000			$	20,617
Less: Unamortized issuance costs	—					(20,617		)
Less: Reclassified to Liabilities subject to compromise	(1,075,000		)			—
Debt obligations, net of unamortized issuance costs	$	112,553				$	1,224,383

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¹ Issuance costs attributable to the Senior Notes were subject to an accelerated write-off in advance of our bankruptcy filing during the three months ended June 30, 2016.

² Issuance costs attributable to the RBL, which represent costs attributable to the access to credit over the RBL’s contractual term, were presented as a component of Other assets (see Note 11) prior to the accelerated write-off in advance of our bankruptcy filing during the three months ended June 30, 2016.

Revolving Credit Facility

In January 2016, the RBL was amended to (i) allow us to convert to or continue LIBOR loans without having to make a solvency representation and (ii) increase our mortgage requirement from 80 percent to 100 percent (subject to certain exceptions) of our proved reserves. On March 15, 2016, we entered into the Eleventh Amendment (the “Eleventh Amendment”) to the RBL, which provided (i) for an extension before certain events of default under the RBL would occur, (ii) for an initial reduction in commitments and (iii) that the borrowing base under the RBL was not subject to scheduled redetermination until May 15, 2016. Specifically, the extension period with respect to events of default was through 12:01 am on April 12, 2016, which was further extended through 12:01 am on May 10, 2016, as certain conditions were satisfied. The key conditions to the first extension (to April 12, 2016) and entry into the Eleventh Amendment were: (i) termination of certain hedge agreements and application of the proceeds against the loans (which resulted in a further reduction in our lenders’ commitments), (ii) entry into control agreements over deposit accounts, subject to customary exceptions, (iii) payment of adviser fees and (iv) agreement to certain changes to the RBL, including increasing the interest rate by 1.00%, tightening certain restrictive covenants and agreeing that monthly hedge settlements would be applied against the loans. The key conditions to the second extension (to May 10, 2016) were: (i) termination of certain additional hedges and application of a portion of the proceeds against the loans (which resulted in a further reduction in our lenders’ commitments) and (ii) no notification by the representative of the Ad Hoc Committee that they did not support such extension.

In connection with the Eleventh Amendment and second extension, we terminated certain derivative contracts representing hedges and proceeds of $22.9 million and $16.6 million were applied to reduce the amounts outstanding under the RBL in March 2016 and April 2016, respectively. We also made an optional payment on the RBL in April 2016 in the amount of $5.4 million. Finally, we terminated our remaining pre-petition derivative contracts in May 2016 immediately prior to our bankruptcy filing and proceeds of $12.5 million were applied to reduce the amounts outstanding under the RBL to the amount currently outstanding.

Borrowings under the RBL bear interest at either (i) a rate derived from the London Interbank Offered Rate, as adjusted for statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”), plus an applicable margin (ranging from 2.500% to 3.500%) or (ii) the greater of (a) the prime rate, (b) the federal funds effective rate plus 0.5% or (c) the one-month Adjusted LIBOR plus 1.0% (clauses (a), (b) and (c) (the “Base Rate”)), and, in each case, plus an applicable margin (ranging from 1.500% to 2.500%). The applicable margin is determined based on the ratio of our outstanding borrowings to the available RBL capacity. As of June 30, 2016, the actual interest rate on the outstanding borrowings under the RBL was 6.000% which is derived from a base rate of 3.500% plus an applicable margin of 2.500%.

The RBL is guaranteed by us and all of our material subsidiaries (the “Guarantor Subsidiaries”). The obligations under the RBL are secured by a first priority lien on substantially all of our proved oil and gas reserves and a pledge of the equity interests in the Guarantor Subsidiaries.

The RBL includes current ratio, leverage ratio and credit exposure financial covenants. As of June 30, 2016, and through the date upon which the Condensed Consolidated Financial Statements were issued, we were not in compliance with the current ratio covenant or the leverage ratio covenant under the RBL. The amounts outstanding under the RBL have been reclassified to current at December 31, 2015, and remain as such as of June 30, 2016.

As of June 30, 2016, the commitments under the RBL were $114.4 million, which is equal to our currently outstanding loans ($112.6 million) and issued letters of credit ($1.9 million). The commencement of the Chapter 11 case on May 12, 2016 constituted an event of default that accelerated our obligations under the RBL. Additionally, other events of defaults existed as of May 12, 2016 as a result of our failure to comply with certain of our financial covenants under the RBL as discussed above. Because of these defaults and our lack of available commitment capacity, we were unable to draw on the RBL as of June 30, 2016 and currently. We continue to accrue and pay interest on the RBL during the pendency of the bankruptcy proceedings.

2019 Senior Notes

Our 2019 Senior Notes, which were issued at par in April 2011, bear interest at an annual rate of 7.25% payable on April 15 and October 15 of each year. The 2019 Senior Notes are senior to our existing and future subordinated indebtedness and are effectively subordinated to our secured indebtedness, including the RBL, to the extent of the collateral securing that indebtedness. The obligations under the 2019 Senior Notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries. Our bankruptcy filing represented an event of default under the indenture governing the 2019 Senior Notes. The 2019 Senior Notes and accrued interest through May 12, 2016, including amounts that we elected not to pay on April 15, 2016, have been included in “Liabilities subject to compromise” on our Condensed Consolidated Balance Sheet as of June 30, 2016 (see Note 3). In connection with the bankruptcy filing, we have suspended the accrual of interest on the 2019 Senior Notes during the post-petition period.

2020 Senior Notes

Our 2020 Senior Notes, which were issued at par in April 2013, bear interest at an annual rate of 8.50% payable on May 1 and November 1 of each year. The 2020 Senior Notes are senior to our existing and future subordinated indebtedness and are effectively subordinated to our secured indebtedness, including the RBL, to the extent of the collateral securing that indebtedness. The obligations under the 2020 Senior Notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries. Our bankruptcy filing represented an event of default under the indenture governing the 2020 Senior Notes. The 2020 Senior Notes and accrued interest through May 12, 2016, including amounts that we elected not to pay on May 1, 2016, have been included in “Liabilities subject to compromise” on our Condensed Consolidated Balance Sheet as of June 30, 2016 (see Note 3). In connection with the bankruptcy filing, we have suspended the accrual of interest on the 2020 Senior Notes during the post-petition period.

Guarantees

The guarantees under the RBL and the 2019 Senior Notes and 2020 Senior Notes are full and unconditional and joint and several. Substantially all of our consolidated assets are held by the Guarantor Subsidiaries. The parent company and its non-guarantor subsidiaries have no material independent assets or operations.