Berry Petroleum has increased its credit facility and borrowing base to continue its acquisition and growth strategy. The oil and gas company boosted its borrowing base to $500 million, up from $350 million, and increased its credit facility to $750 million from $500 million. Also, the five-year unsecured revolver was extended by a year to July 1, 2011.
The company sought the amendment to accommodate its $160 million acquisition of Piceance Basin, said Ralph Goehring, exec v.p. and cfo at Berry. The acquisition brought the current debt to $249 million, leaving only $101 million from the previous $350 million base. The new agreement gives Berry a borrowing base of $251 million. Goehring said that the firm wants to make sure it can make future acquisitions, and also raise the base. Berry reevaluates its borrowing base annually.
The pricing is a graduated rate based on the percentage of borrowing from the base: 50% and under is LIBOR plus 100 basis points, and 50-75%, 75-90% and 90% and up, each increase 25 basis points consecutively. Current pricing is LIBOR plus 1%.
Wells Fargo leads the syndication, while Société Générale, BNP Paribas, Citigroup and JPMorgan follow as higher level documentation and co-syndication agents, among the 10 banks. US Bank joined the syndicate this year. The amendment was requested by Berry.