Note 4—Long-Term Debt

Credit Agreement

CRP, the Company’s consolidated subsidiary, has a credit agreement with a syndicate of banks that as of June 30, 2017 had a borrowing base of $350.0 million, which has been committed by lenders and is available for borrowing. A portion of the revolving credit facility in an aggregate amount not to exceed $15.0 million may be used to issue letters of credit for the account of CRP or other designated subsidiaries of the Company. As of June 30, 2017, the Company had $314.1 million in available borrowing capacity, which was net of $35.0 million in borrowings and $0.9 million in letters of credit outstanding.

The amount available to be borrowed under CRP's revolving credit facility is subject to a borrowing base that is redetermined semi-annually each April 1 and October 1 by the lenders in their sole discretion. CRP's credit agreement also allows for two optional borrowing base redeterminations on January 1 and July 1. The borrowing base depends on, among other things, the volumes of CRP’s proved oil and natural gas reserves and estimated cash flows from these reserves and its commodity hedge positions. The borrowing base will automatically be decreased by an amount equal to 25% of the aggregate notional amount of issued permitted senior unsecured notes unless such decrease is waived by the lenders. Upon a redetermination of the borrowing base, if borrowings in excess of the revised borrowing capacity are outstanding, CRP could be required to immediately repay a portion of its debt outstanding under its credit agreement. The credit facility provides for interest only payments until October 15, 2019, when the credit agreement expires and all outstanding borrowings are due.

The following table shows five succeeding fiscal years of scheduled maturities for the Company’s long-term debt as of June 30, 2017 (in thousands):



	2017	2018	2019	2020	2021
Long-term debt	—	—	35,000	—	—

Interest and commitment fees are accrued based on a borrowing base utilization grid set forth in the credit agreement and are discussed in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” later in this report. Commitment fees are accrued on the unused portion of the aggregate lender commitment amount and are included in interest expense in the accompanying statements of operations.

CRP’s credit agreement contains restrictive covenants that limit its ability to, among other things: incur additional indebtedness; make investments and loans; enter into mergers; make or declare dividends; enter into commodity hedges exceeding a specified percentage of our expected production; enter into interest rate hedges exceeding a specified percentage of our outstanding indebtedness; incur liens; sell assets; and engage in transactions with affiliates.

CRP’s credit agreement also requires it to maintain compliance with the following financial ratios: (1) a current ratio, which is the ratio of CRP’s consolidated current assets (including unused commitments under its revolving credit facility and excluding non-cash assets under Financial Accounting Standards Board FASB Accounting Standard Codification ASC Topic 815, Derivatives and Hedging and certain restricted cash) to its consolidated current liabilities (excluding the current portion of long-term debt under our credit agreement and non-cash liabilities under ASC 815), of not less than 1.0 to 1.0; and (2) a leverage ratio, which is the ratio of Total Funded Debt (as defined in CRP’s credit agreement) to consolidated EBITDAX (as defined in CRP’s credit agreement) for the rolling four fiscal quarter period ending on such day, of not greater than 4.0 to 1.0.

CRP was in compliance with the covenants and the financial ratios described above as of June 30, 2017 and through the filing of this report.