NOTE 9. LONG–TERM DEBT

The following table presents the consolidated debt obligations at the dates indicated:


	September 30, 2019		December 31, 2018
Exit Credit Facility	$	—	$	115,000

In connection with the Company’s emergence from bankruptcy, on the Effective Date, the Company entered into a Credit Agreement providing for a $1.0 billion new reserve-based revolving loan (the “Exit Credit Facility”). The Exit Credit Facility matures on February 26, 2021. Borrowings under the Exit Credit Facility are secured by a first priority lien on substantially all of the Company’s oil and natural gas properties. The Company may use borrowings under the Exit Credit Facility for acquiring and developing oil and natural gas properties, for working capital purposes and for general corporate purposes. The Company also may use up to $50.0 million of available borrowing capacity for letters of credit. As of September 30, 2019, the Company had a $0.1 million letter of credit outstanding.

The terms of the Exit Credit Facility do not require any repayments of amounts outstanding until it matures in February 2021. Borrowings under the credit facility bear interest at a floating rate based on, at the Company’s election, a base rate or the London Interbank Offered Rate plus applicable premiums based on the percent of the borrowing base outstanding (weighted average effective interest rate of 5.10% at December 31, 2018).

Borrowings under the Exit Credit Facility may not exceed a “borrowing base” determined by the lenders under the credit facility based on the Company’s oil and natural gas reserves. During the first quarter of 2019, as a result of divestitures consummated in the fourth quarter of 2018, the borrowing base was reduced by $2.0 million to $260.3 million. In May 2019, in conjunction with the semi-annual redetermination, the borrowing base was reduced by $150.3 million to $110 million, primarily as a result of the divestitures of the San Juan Basin and Mid-Continent assets as well as a decline in bank commodity price assumptions. In addition, in September 2019, as a result of divestitures during the third quarter of 2019, the borrowing base was further reduced by $60.0 million to $50.0 million. As of September 30, 2019, the borrowing base under the Exit Credit Facility was $50.0 million. The borrowing base is subject to scheduled redeterminations semi-annually as of April 1 and October 1 of each year with an additional redetermination once per calendar year at the election of either the Company or the lenders.

The Exit Credit Facility requires the following (as defined in the Credit Agreement):

the Total Debt to EBITDAX ratio covenant to be no greater than 4.0 to 1.0;

the current consolidated assets (including unused commitments under the Exit Credit Facility) to current consolidated liabilities to be no less than 1.0 to 1.0;

the percentage of Mortgaged Properties to be no less than 95% of the total value of the Oil and Gas Properties evaluated in the most recent Reserve Report;

no later than 60 days following the Effective Date, 70% of projected production volumes (excluding projected production volumes from certain properties) be hedged (as of the date such swap agreements were executed) for the 18 months following the Effective Date;

cash held by the Company be limited to the greater of 5% of the current borrowing base or $30.0 million; and

no return of capital to shareholders, however dividends or distributions to shareholders can be made if the Total Debt to EBTIDAX ratio is less than 2.75 to 1.0 and unused availability under the borrowing base is greater than 15%.

On October 4, 2019, the Company terminated the Exit Credit Facility. Also, on October 4, 2019, the Company entered into a new credit agreement providing for a $10.0 million revolving loan (the “New Credit Facility”). The New Credit Facility matures on October 4, 2020. The New Credit Facility may be renewed for a one-year term by mutual agreement between the Company and the lender. Borrowings under the New Credit Facility are secured by cash collateral and bear interest based upon the London Interbank Offered Rate plus 1%. The Company may use borrowings under the New Credit Facility for acquiring and developing oil and natural gas properties, for working capital purposes and for general corporate purposes. The Company also may use up to $2.0 million of available borrowing capacity for letters of credit.