Debt Obligations

6 Months Ended

Jun. 30, 2013

Debt Obligations [Abstract]

Debt Obligations

Note 5 – Debt Obligations

At June 30, 2013, we had $878.3 million in outstanding debt.  Our debt consisted of the following at June 30, 2013 and December 31, 2012:

		June 30,		December 31,
		2013		2012
Senior notes, 12% fixed rate, due 2018	$	554,000	$	554,000
Convertible senior notes, 5.5% fixed rate, due 2016		135,000		135,000
Revolving credit facility, 13% fixed rate, due 2014		115,163		115,163
Convertible bonds, 11.5% until March 31, 2014 and 7.5% thereafter, due 2016		74,114		70,029
		878,277		874,192
Less:  debt discount, net of premium		(13,220)		(14,686)
Less:  current maturities		(115,163)		(15,713)
Long-term debt	$	749,894	$	843,793

Senior Notes

On February 23, 2012, we closed the private placement of $350 million aggregate principal amount of 12% first priority notes due 2018 (the “First Priority Notes”) and $150 million aggregate principal amount of 12% second priority notes due 2018 (the “Second Priority Notes,” and, together with the First Priority Notes, the “2018 Notes”),with an aggregate $20 million discount.  We also paid approximately $21 million in other financing costs related to the 2018 Notes.

On October 15, 2012 we completed our private placement offering of $54 million aggregate principal amount of additional First Priority Notes.

5.5% Convertible Senior Notes

In July 2011, we issued $135 million aggregate principal amount of our 5.5% Convertible Senior Notes due July 15, 2016.  Interest on these notes is payable semi-annually at a rate of 5.5% per annum.  The 5.5% Convertible Senior Notes are convertible into shares of our common stock at an initial conversion rate of 54.019 shares (equivalent to $18.51 per share) of common stock per $1,000 principal amount of the notes, subject to certain anti-dilution adjustments.

Revolving Credit Facility

During 2012, we entered into a $100 million Credit Agreement (the “Revolving Credit Facility”), with Cyan Partners, LP (“Cyan”), as administrative agent, which was subsequently increased to $125 million.  In connection with the increase, we agreed to pay a fee of $1.25 million to Cyan.

Borrowings under the Revolving Credit Facility bear interest at a rate of 13%per year. As of June 30, 2013 and December 31, 2012, we had $115.2 million outstanding under the Revolving Credit Facility.

In the first half of 2013, we entered into amendments to the Revolving Credit Facility whereby (i) the lenders consented to the Production Payment Transaction (discussed in Note 14) and (ii) extended the maturity of the commitments under the under the Revolving Credit Facility was extended from October 12, 2013 to June 30, 2014.

11.5% Convertible Bonds

Our 11.5% Convertible Bonds bear interest at a rate of 11.5% per annum until March 31, 2014 and 7.5% thereafter.  Interest is compounded quarterly and added to the outstanding principal balance each quarter.  The bonds are convertible into shares of our common stock at an initial conversion price of $16.52 per $1,000 of principal, which represents a conversion rate of approximately 61 shares of our common stock per $1,000 of principal.

Fair Value

The fair value of our outstanding debt obligations was $770 million and $870 million at June 30, 2013 and December 31, 2012, respectively.  The fair values of long-term debt were determined based upon external market quotes for our Senior Notes and an income approach for other debt, using a credit adjusted discount rate at the reporting date, and classified as Level 3 in the fair value hierarchy.