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Long-Term Debt
9 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
Long-Term Debt

Note 6. Long-Term Debt

On December 19, 2014, the Company entered into a credit agreement providing for a $500.0 million four-year senior secured revolving credit facility (the “ESTE Credit Facility”).  The OVR credit facility was refinanced under the ESTE Credit Facility and the legacy credit facility of the Company was paid in full and terminated.

The initial borrowing base of the ESTE Credit Facility was $80.0 million and is subject to redetermination during May and November of each year. At the option of the borrower, the amounts borrowed under the credit agreement bear annual interest rates at either (a) LIBOR plus the applicable utilization margin of 1.50% to 2.50% (1.704% at September 30, 2015) or (b) the base rate plus the applicable utilization margin of 0.50% to 1.50% (3.75% at September 30, 2015). Principal amounts outstanding under the ESTE Credit Facility are due and payable in full at maturity on December 19, 2018. All of the obligations under the credit agreement, and the guarantees of those obligations, are secured by substantially all of the Company’s assets. Additional payments due under the credit agreement include paying a commitment fee to the Lender in respect of the unutilized commitments thereunder. The commitment fee ranges from 0.375% to 0.50% per year, depending upon the unutilized portion of the borrowing base in effect from time to time. The Company is also required to pay customary letter of credit fees.

As of September 30, 2015, the Company had $11.2 million of debt outstanding, bearing an interest rate of 1.704%, $0.3 million of letters of credit outstanding and $68.5 million of borrowing base available under its ESTE Credit Facility.

The ESTE Credit Facility contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness, create liens on asset, pay dividends, and repurchase its capital stock. In addition, the Company is required to maintain certain financial ratios, including a minimum modified current ratio which includes the available borrowing base of 1.0 to 1.0 and a maximum annualized quarterly leverage ratio of 4.0 to 1.0. The Company is also required to submit an audited annual report 120 days after the end of each fiscal period.  As of September 30, 2015, the Company was in compliance with these covenants.

Interest expense for the three months ended September 30, 2015 and 2014, includes amortization of deferred financing costs of $65,000 and $38,000, respectively.  Interest expense for the nine months ended September 30, 2015 and 2014, includes amortization of deferred financing costs of $195,000 and $113,000, respectively.  Approximately $1.0 million, net of amortization, associated with the Company’s credit facilities has been capitalized as of September 30, 2015 and December 31, 2014, and was being amortized over the terms of the credit agreements.