DEBT

The Company’s debt consists of the following (in thousands):



	September 30, 2016			December 31, 2015
7.500% senior unsecured notes due 2022	$	550,000		$	550,000
6.250% senior unsecured notes due 2024	400,000			—
Capital leases	2,924			2,215
Revolving Credit Agreement	—			—
Total debt	952,924			552,215
Debt issuance costs on senior unsecured notes	(16,697		)	(9,092		)
Premium on senior unsecured notes	8,042			4,660
Less: current portion	(1,543		)	(951		)
Total long-term debt	$	942,726		$	546,832

Revolving Credit Agreement

As of September 30, 2016, the Borrowing Base (as defined therein) under the Revolving Credit Agreement was $475.0 million, with a commitment level of $475.0 million. The Borrowing Base was reduced from $525.0 million as of August 19, 2016 as a result of the New 2024 Notes Offering. There were no borrowings outstanding and $0.3 million in letters of credit outstanding as of September 30, 2016, resulting in availability of $474.7 million. See Note 15—Subsequent Events, for information regarding the terms of the New Revolving Credit Agreement, which the Company entered into on October 28, 2016.

As of September 30, 2016, letters of credit under the Revolving Credit Agreement bear a 1.5% weighted average interest rate.

6.250% Senior Unsecured Notes due 2024

On August 16, 2016, as discussed in Note 1—Organization and Nature of Operations, Parsley LLC, Finance Corp. and the guarantors of the 2024 Notes entered into a purchase agreement with J.P. Morgan Securities LLC, as representative of the several initial purchasers, in connection with the New 2024 Notes Offering. The net proceeds from the New 2024 Notes Offering were $199.6 million, after deducting accrued and unpaid interest, initial purchaser discounts and commissions and offering expenses. The Company used the net proceeds from the New 2024 Notes Offering, along with the net proceeds from the Equity Offering, to fund the Glasscock County Acquisition discussed in Note 5—Acquisitions of Oil and Natural Gas Properties, and the remaining net proceeds will be used to fund a portion of the Company’s capital program and for general corporate purposes, including potential future acquisitions.

Covenant Compliance

The Revolving Credit Agreement and the indentures governing the Notes restrict our ability and the ability of certain of our subsidiaries to, among other things: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire our capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from our restricted subsidiaries to us; (vii) consolidate, merge or transfer all or substantially all of our assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications. If at any time when the Notes are rated investment grade by either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services and no default or event of default (as defined in the indentures) has occurred and is continuing, many of the foregoing covenants pertaining to the Notes will be suspended. If the ratings on the Notes were to decline subsequently to below investment grade, the suspended covenants would be reinstated.

As of September 30, 2016, the Company was in compliance with all required covenants under the Revolving Credit Agreement and the indentures governing the Notes.

Principal Maturities of Debt

Principal maturities of debt outstanding at September 30, 2016 are as follows (in thousands):



2016	$	363
2017	1,488
2018	781
2019	292
2020	—
Thereafter	950,000
Total	$	952,924

Interest Expense

The following amounts have been incurred and charged to interest expense for the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cash payments for interest	$	21,668		$	21,296		$	42,909		$	43,306
Change in interest accrual	(6,396		)	(10,266		)	(4,828		)	(10,528		)
Amortization of deferred loan origination costs	753			559			1,964			1,593
Write-off of deferred loan origination costs	155			—			329			532
Amortization of bond premium	(234		)	(191		)	(617		)	(573		)
Other interest (income) expense	(385		)	(5		)	(803		)	4
Total interest expense, net	$	15,561		$	11,393		$	38,954		$	34,334