UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 12, 2011
DELTA PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
| DELAWARE | 0-16203 | 84-1060803 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
370 17th Street
Suite 4300
Denver, Colorado 80202
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (303) 293-9133
No Change
(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 (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On December 12, 2011, Delta entered into the Third Amendment (the “Third Amendment”) to Third Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with Macquarie Bank Limited, as administrative agent for the lenders named in the Credit Agreement. In conjunction with the Third Amendment, the lenders increased the term loan available to Delta from $15 million to $22 million. Advances on the incremental $7 million available under the term loan are permitted to be made in two tranches of up to $5.5 million and up to $1.5 million commencing on December 12, 2011 and December 19, 2011, respectively. On December 12, 2011, Delta requested and received the first incremental term loan tranche of $5.5 million. Additionally, Delta agreed to pay the lenders an aggregate one-time amendment fee of $140,000, equal to 2% of the incremental term loan availability, in consideration of the financial accommodations extended to Delta under the Third Amendment.
The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to the Third Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 8.01 Other Events.
On December 16, 2011, Delta issued a press release announcing that it and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit |
Description | |
| 10.1 | Third Amendment to Third Amended and Restated Credit Agreement, dated December 12, 2011, between Delta Petroleum Corporation and Macquarie Bank Limited, as administrative agent | |
| 99.1 | Delta Petroleum Corporation Press Release, dated December 16, 2011 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 16, 2011
| Delta Petroleum Corporation | ||
| By: | /s/ Stanley F. Freedman | |
| Stanley F. Freedman | ||
| Executive Vice President and Secretary | ||
EXHIBIT INDEX
| Exhibit |
Description | |
| 10.1 | Third Amendment to Third Amended and Restated Credit Agreement, dated December 12, 2011, between Delta Petroleum Corporation and Macquarie Bank Limited, as administrative agent | |
| 99.1 | Delta Petroleum Corporation Press Release, dated December 16, 2011 | |
EXHIBIT 10.1
EXECUTION VERSION
THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of December 12, 2011, between Delta Petroleum Corporation, a Delaware Corporation (“Borrower”) and Macquarie Bank Limited, as the Administrative Agent for the Lenders to the Credit Agreement (defined below) and as Issuing Lender for the Lenders. Capitalized terms used but not defined in this Amendment have the meaning given them in the Credit Agreement.
Background
A. Borrower, Lenders and Administrative Agent have previously entered into that Third Amended and Restated Secured Credit Agreement dated December 29, 2010 (as amended, restated, modified or otherwise supplemented from time to time, the “Credit Agreement”), for the purpose of making available to Borrower a senior secured term loan for the purposes set forth in the Credit Agreement.
B. Borrower, Lenders and Administrative Agent desire to modify certain terms and conditions of the Credit Agreement.
C. Lenders and Administrative Agent are willing to amend the Credit Agreement pursuant to the terms and conditions of this Amendment.
Agreements
In consideration of the mutual covenants of Borrower, Lenders and Administrative Agent set forth in this Amendment and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by each of the parties, Borrower, Lenders and Administrative Agent agree as follows:
1. Definitions. Appendix I referenced in Article I is amended by adding the following definition in alphabetical order:
“Third Amendment” means the Third Amendment to the Third Amended and Restated Credit Agreement between Borrower, Lenders and Administrative Agent dated as of December 12, 2011.
2. Amendments.
(a) Section 2.3 of the Credit Agreement is deleted in its entirety and replaced with the following:
Section 2.3 Availability and Purposes of Term Loan Advances.
(a) Beginning on the Closing Date, and continuing through the applicable Commitment Termination Date, up to $22,000,000 is available under the Term Loan and shall be used by Borrower in accordance with Section 5.9 and as follows:
(i) to repay amounts Advanced under the Revolving Loan;
(ii) to pay costs incurred by Borrower in connection with the drilling and completion of Wells and other development activities on Borrower’s Oil and Gas Properties; and
(ii) for any other purpose Approved by Administrative Agent.
(b) From the date of the Third Amendment, up to $7,000,000 of the amount available under the Term Loan (the “Incremental Term Loan Availability”) can be used by Borrower in accordance with Section 5.9 for general corporate purposes.
(c) Borrower can, subject to the terms and conditions of this Agreement, request Advances of the Incremental Term Loan Availability as follows:
(i) commencing December 12, 2011, Borrower can request aggregate Advances of up to $5,500,000; and
(ii) commencing December 19, 2011, Borrower can request aggregate Advances of up to an additional $1,500,000.
3. Amounts Outstanding. As of the date of this Amendment:
(a) The Borrowing Base is $18,000,000 and the principal amount outstanding under the Revolving Loan is $18,000,000. There is currently no availability under the Revolving Loan.
(b) The total Term Loan availability (after giving effect to this Amendment) is $22,000,000 and the principal amount outstanding under the Term Loan (before any Advances in respect of the Incremental Term Loan Availability) is $15,000,000.
4. Conditions to Effectiveness of this Amendment. Notwithstanding the other conditions to the making of any Advance under Article III of the Credit Agreement, as a condition to the effectiveness of this Amendment, Borrower will execute and deliver to Administrative Agent the following documents, each in form and substance acceptable to Administrative Agent:
(a) this Amendment;
(b) an Advance Request for the initial Advance out of the Incremental Term Loan Availability; and
(c) any other document necessary or convenient in the opinion of Administrative Agent or its counsel to give effect to the modifications to the Credit Agreement contemplated by this Amendment;
5. Amendment Fee. In consideration of the financial accommodations extended to Borrower under this Amendment, Borrower will pay to Administrative Agent, for the ratable benefit of the Lenders, a one-time amendment fee equal to 2% of the Incremental Term Loan Availability. The Amendment Fee will be earned by the Lenders when this Amendment becomes effective, and is payable by Borrower without regard to whether Borrower actually requests an Advance out of the Incremental Term Loan Availability.
6. Reaffirmation of Representations and Warranties, Additional Representations and Warranties. Borrower, to induce Lenders to enter into this Amendment, hereby reaffirm, as of the date hereof (except to the extent the previous representations and warranties speak as to a certain date), its representations and warranties contained in the Credit Agreement and in all other documents executed pursuant thereto, and additionally represent and warrant as follows:
(a) The execution and delivery of this Amendment and the performance by Borrower of its obligations under this Amendment are within the power of Borrower, have been duly authorized by all necessary company action, have received all necessary governmental approvals (if any shall be required), and do not and will not contravene or conflict with (i) any provision of law applicable to Borrower or any Guarantor, (ii) any of the respective certificates or articles of incorporation, bylaws, limited liability company agreements, or other similar governance documents of Borrower or any Guarantor, or (iii) any agreement binding upon Borrower or any Guarantor or any of their respective assets.
(b) This Amendment represents the legal, valid and binding obligations of Borrower; those obligations have been given for fair and equivalent value and are enforceable against Borrower in accordance with their terms except as enforceability may be limited by applicable laws relating to bankruptcy, insolvency, reorganization or relief of debtors and by general equitable principles.
7. Ratification of Liens and Security Interests. Borrower hereby acknowledges and ratifies the existence and priority of the Liens granted by Borrower in favor of Lender in and to the Collateral and represents, warrants and covenants that such liens and security interests are valid, existing and in full force and effect.
8. Miscellaneous. The Credit Agreement, as amended hereby, supersedes all prior agreements (written or oral) between Borrower and Lenders with regard to the subject matters hereof. This Amendment is a Loan Document. Except as affected by this Amendment, the Loan Documents are unchanged and continue in full force and effect. However, in the event of any inconsistency between the terms of the Credit Agreement as amended by this Amendment and
any other Loan Document, the terms of the Credit Agreement will control and the other document will be deemed to be amended to conform to the terms of the Credit Agreement. All references to the Credit Agreement will refer to the Credit Agreement as amended by this Amendment and any other amendments properly executed among the parties. Borrower and each of the Guarantors agree that all Loan Documents to which they are a party (whether as an original signatory or by assumption of the Obligations) remain in full force and effect and continue to evidence their legal, valid and binding obligations enforceable in accordance with their terms (as the same are affected by this Amendment or are amended in connection with this Amendment). Borrower releases Lenders and Administrative Agent from any liability for actions or failures to act in connection with the Loan Documents prior to the date of this Amendment. No course of dealing among Borrower and Lender or any other Person will be deemed to have altered or amended the Credit Agreement or affected either Borrower’s or Lender’s right to enforce the Credit Agreement as written. This Amendment will be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns.
9. Form. Each agreement, document, instrument or other writing to be furnished to Lender under any provision of this instrument must be in form and substance satisfactory to Lender and its counsel.
10. Multiple Counterparts. This Amendment may be executed in more than one counterpart, each of which shall be deemed an original, and all of which constitute, collectively, one instrument; but, in making proof of this instrument, it shall not be necessary to produce or account for more than one such counterpart. It shall not be necessary for Borrower and Lenders to execute the same counterpart hereof so long as Borrower and Lenders each execute a counterpart hereof. For purposes of this Amendment, an electronic copy of any party’s signature to this Amendment shall be deemed an original signature.
11.
GOVERNING LAW. THIS AMENDMENT AND ALL TRANSACTIONS PROVIDED FOR IN THIS AMENDMENT WILL BE GOVERNED BY, INTERPRETED AND CONSTRUED UNDER AND ENFORCED PURSUANT TO THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.
12. FINAL AGREEMENT. THE LOAN DOCUMENTS, AS AMENDED BY OR IN CONNECTION WITH THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
[THE NEXT PAGES ARE THE SIGNATURE PAGES]
IN WITNESS WHEREOF, the parties have executed this Amendment on the date first set forth above.
| BORROWER: | ||
| DELTA PETROLEUM CORPORATION, a Delaware corporation | ||
| By: | /s/ Kevin Nanke | |
| Name: Kevin Nanke | ||
| Title: CFO | ||
SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment on the date first set forth above.
| LENDER and ADMINISTRATIVE AGENT: | ||||
| MACQUARIE BANK LIMITED, a Bank incorporated in accordance with the laws of Australia | ||||
| By: | /s/ Katie Choi | |||
| Name: | Katie Choi | |||
| Title: | Division Director | |||
| By: | /s/ Robert McRobbie | |||
| Name: | Robert McRobbie | |||
| Title: | Division Director | |||
SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
Exhibit 99.1
DELTA PETROLEUM CORPORATION
Daniel Taylor, Chairman
Carl Lakey, CEO
Kevin Nanke, Treasurer and CFO
Broc Richardson, V.P. Corporate Development and IR
370 17th Street, Suite 4300
Denver, Colorado 80202
For Immediate Release
DELTA PETROLEUM CORPORATION AND CERTAIN OF ITS
SUBSIDIARIES FILE VOLUNTARY PETITIONS FOR CHAPTER 11
REORGANIZATION
DENVER, Colorado, (December 16, 2011) — Delta Petroleum Corporation (NASDAQ: DPTR) announced today that it and certain of its subsidiaries (collectively, “Delta” or the “Company”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
“After reviewing all of our alternatives, the Company’s management and Board of Directors, working in consultation with outside legal and financial advisors, unanimously determined that the Chapter 11 process would provide the opportunity for the best result for our creditors, shareholders, suppliers, employees and customers. We are committed to diligently working for all of our stakeholders to achieve the best possible outcome from this process,” said Carl E. Lakey, Chief Executive Officer and President of Delta.
The Company anticipates that its current and future cash resources will be sufficient to pay its court expenses and maintain its business operations in the short-term. Additionally, the Company will seek Court approval of a debtor in possession (DIP) financing facility of $57.5 million arranged by it to address longer term liquidity needs as it works through the bankruptcy process.
The Company is also seeking, and expects to receive, approval from the Bankruptcy Court for a variety of other motions it will file, including, but not limited to, requests to pay employee wages, salaries and employee benefits, royalty interest owners, and vendors who are to the continued operation of the Company’s business.
ABOUT DELTA PETROLEUM
Delta Petroleum Corporation is an oil and gas exploration and development company based in Denver, Colorado. The Company’s core area of operation is the Piceance Basin in the Rocky Mountain region, which comprise the majority of its proved reserves, production. Its common stock is listed on the NASDAQ Global Market System under the symbol “DPTR.”
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this announcement are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, the length and outcome of the bankruptcy process, the availability of financing and rulings of the bankruptcy court. Readers are cautioned that all forward-looking statements are based on management’s present expectations, estimates and projections, but involve risks and uncertainty, including without limitation, uncertainties in the bankruptcy process, the ability to obtain debtor in possession financing, the length of time that the Company will be in bankruptcy, the amount of claims that might be asserted against the bankruptcy estate, the potential for adverse rulings by the bankruptcy court, as well as general market conditions, competition and pricing. Please refer to the Company’s report on Form 10-K for the year ended December 31, 2010 and subsequent reports on Forms 10-Q and 8-K as filed with the Securities and Exchange Commission for additional information. The Company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
For further information contact the Company at (303) 293-9133 or via email at info@deltapetro.com
| SOURCE: | Delta Petroleum Corporation |