Lonestar Resources US Inc. (ticker: LONE) has closed its previously announced offering of $250 million aggregate principal amount of 11.250% senior notes due 2023. According to a press release from Lonestar Resources, the notes were issued, under the indenture, dated as of January 4, 2018, by and among LRAI, the subsidiary guarantors named therein and UMB Bank, N.A., as trustee. The notes are fully and unconditionally guaranteed on a senior unsecured basis by each of LRAI’s current subsidiaries that guarantee LRAI’s revolving credit facility.  The notes are not guaranteed by Lonestar and it is not subject to the terms of the indenture.

The net proceeds of the notes offering will be used to fully retire Lonestar’s existing 8.75% senior unsecured notes due April, 2019, which bear principal, interest and prepayment premium of approximately $162 million. The remaining net proceeds of the notes offering will be used to reduce borrowings under Lonestar’s senior secured credit facility.

Lonestar and its lenders also amended its facility to maintain the existing borrowing base at $160 million. In addition, by operation of the transactions described above and the existing terms of its facility, the maturity date of the facility has been extended from October, 2018 to July, 2020.  Lonestar will have approximately $60 million outstanding on its facility, proforma December 31, 2017. As a result, Lonestar has approximately $100 million of liquidity under its facility.

Frank D. Bracken, III, Lonestar’s chief executive officer commented, “closing our notes offering and amending our senior secured credit facility represent the culmination of our efforts to financially reposition Lonestar. First, the transactions meaningfully extend the profile of both our secured and unsecured debt maturities.  Second, the transactions greatly expand our liquidity to approximately $100 million.  Looking to 2018, we are now fully focused on executing our plan to increasing annual average production to 10,000-10,700 BOE per day and increasing EBITDAX by approximately 60% to $100$110 million.  This growth is expected to reduce our net debt / EBITDAX ratio to below 3.0x by year-end 2018.  Most importantly, Lonestar is now positioned to increase shareholder value by driving up production, reserves and cash flow on a per-share basis.”

Lonestar is focused on the Eagle Ford Shale in Texas.


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