Each one in plain English, with the numbers worked through for a shareholder.
8 Feb 2011material agreement● NeutralMajor
On Feb 4, 2011 GMX agreed to sell $200M of 11.375% senior unsecured notes due 2019 to initial purchasers (Credit Suisse and Morgan Stanley) at 93.583% of face in the agreement text, while the press release says 96.833%; the filing gives both figures without reconciling them. Proceeds, with a concurrent stock offering, are to fund an offer to buy up to $50M of the 2013 convertibles, repay the bank revolver, pay the cash part of about $68.3M of pending lease acquisitions, and fund drilling and general purposes. This is the senior notes step the new bank loan required, and it adds high-cost debt maturing in 2019.
This amendment to the Feb 2 filing adds a First Amendment dated Feb 3, 2011 to the Fifth Amended and Restated Loan Agreement. The agreement still takes effect only if GMX completes at least $75M of common stock and $175M of senior unsecured notes by Feb 28, 2011, with at least $50M placed in a restricted account to retire 2013 convertibles (to no more than $75M principal within 45 days of effectiveness). It repeats the $100M commitment, $60M initial borrowing base and Jan 1, 2013 maturity, and adds a requirement that no advances be outstanding under the prior loan agreement. This continues the open financing thread; the filing does not say what the Feb 3 amendment changed beyond this.
On Feb 2, 2011 GMX signed a Fifth Amended and Restated Loan Agreement with Capital One and its bank group, turning the January commitment letter into a signed deal. It takes effect only if GMX raises at least $75M of common stock and $175M of senior unsecured notes by Feb 28, 2011, and puts at least $50M of proceeds in a restricted account to retire 2013 convertible notes so that no more than $75M remains within 45 days. It provides a $100M commitment with a $60M initial borrowing base, matures Jan 1, 2013 (extended to Dec 31, 2013 if the 2013 convertibles are gone), and caps senior secured debt at 2.50x EBITDA. The agreement lapses if the conditions are not met by Feb 28, 2011, so the outcome of the equity and notes offerings is an open thread.
28 Jan 2011capital raising announcement● NeutralMajor
On Jan 24, 2011 GMX agreed to buy undeveloped Bakken acreage in McKenzie and Dunn Counties, North Dakota for about $31.3M (one-third cash, two-thirds stock, with the share price collared between $5.50 and $6.50), and signed a letter of intent for a further Williams County deal of about $7.3M on the same terms. The press release says it now has four purchase agreements and one letter of intent covering about 67,724 net acres across the Bakken and the Niobrara (Wyoming), and says it plans to raise capital to fund development. It also has a commitment letter with Capital One for a new credit agreement with a $60M initial borrowing base and January 1, 2013 maturity, conditional on debt and equity financings. This expands the Bakken thread into a broader shift toward oil acreage and implies significant new share issuance.
20 Jan 2011capital raising announcement● NeutralMajor
On Jan 13, 2011 GMX agreed to buy undeveloped Bakken/Sanish-Three Forks acreage in Montana and North Dakota from Retamco Operating, paying up to 2,669,513 new shares plus about $1.8M cash, with closing due by Feb 28, 2011. This is a first step outside the East Texas Haynesville/Bossier and Cotton Valley focus, and the share issuance would dilute existing holders. The release also reports Haynesville/Bossier proved reserves of 234.1 Bcfe at year-end 2010 (up from 25.9 Bcfe) and says the company is exploring joint ventures on its undeveloped East Texas acreage and options on its 60% Endeavor Gathering stake to address liquidity needs.
27 Dec 2010capital raising announcement● NeutralMajor
On Dec 21, 2010 GMX amended its July 2010 bank loan agreement: the $130M borrowing base stays until the next redetermination, a new limit caps senior secured debt at 2.50x EBITDA, and the total net debt/EBITDA limit is eased to 4.75x (Dec 2010-Feb 2011), 4.60x (Mar-Aug 2011) and 4.40x (Sep-Oct 2011), returning to 4.00x from Nov 2011. It also exchanged $2.25M of its 2013 convertible notes for 380,250 new common shares plus cash for accrued interest, and the press release says 2011 capital spending is cut to $110M with one rig drilling. The covenant relief continues the July 2010 loan thread but adds a new secured-debt limit; the note exchange slightly dilutes shareholders.
Morgan Stanley I.R.S. #, Morgan Stanley Investment Managemen reported a GMX RESOURCES INC shareholding of 66,332 shares (2.00% of votes) in a periodic institutional filing.
On July 8, 2010 GMX signed a Fourth Amended and Restated Loan Agreement with its bank group, extending the maturity from July 15, 2011 to August 1, 2012, with an automatic extension to July 8, 2013 in certain circumstances. The maximum debt-to-EBITDA ratio is relaxed to 4.50 for June to December 2010 and 4.25 for January to June 2011, returning to 4.00 from July 2011, and the debt definition now counts only the debt portion of the convertible notes. U.S. Bank and Credit Suisse join as lenders, and Union Bank and Fortis leave. The borrowing base stays at $130 million.
