
In thousands	September 30, 2020		December 31, 2019
Senior Secured Credit Facility	$	285,000	$	247,000
11.25% Senior Notes due 2023	250,000		250,000
Mortgage debt (1)	8,781		8,931
PPP loan	2,157		—
Other	260		271
Total principal	546,198		506,202
Unamortized discount (2)	—		(3,375)
Unamortized debt issuance costs (2)	—		(759)
Total debt, prior to reclassification to liabilities subject to compromise	546,198		502,068
Less amounts reclassified to liabilities subject to compromise (3)	(252,417)		—
Total debt not subject to compromise (4)	293,781		502,068
Less current obligations (5)	(285,000)		(247,000)
Total long-term debt (6)	$	8,781	$	255,068

(2) As a result of the Chapter 11 Cases and the adoption of ASC 852, the Company wrote off the unamortized discount and issuance cost balances related to the 11.25% Senior Notes to reorganization items, net in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020. See Note 1. Basis of Presentation for more information.

On September 30, 2020, the Debtors filed for relief under chapter 11 of the Bankruptcy Code. The commencement of a voluntary proceeding in bankruptcy constituted an immediate event of default under the Credit Facility (as defined below) and the indentures governing the Company’s 11.25% Senior Notes (as defined below), resulting in the automatic and immediate acceleration of the debt. Any efforts to enforce payment obligations related to the acceleration of the Company’s debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. See Note 1. Basis of Presentation for more information on the Chapter 11 Cases.

In July 2015, through its subsidiary, Lonestar Resources America, Inc. ("LRAI"), the Company entered into a $500 million Senior Secured Credit Facility with Citibank, N.A., as administrative agent, and other lenders party thereto (as amended, supplemented or modified from time to time, the “Credit Facility”). As of September 30, 2020, $285.0 million was borrowed under the Credit Facility, and the weighted average interest rate on borrowings under the Credit Facility for the quarter was 4.98%. Prior to default, the borrowing availability was $0.6 million, which reflected $0.4 million of letters of credit outstanding. As a result of the commencement of the Chapter 11 Cases, the Company is not in compliance with the covenants under the Credit Facility and the lenders’ commitments under the Credit Facility have been terminated. The Company is therefore unable to make additional borrowings or issue additional letters of credit under the Credit Facility.

Prior to default, the Credit Facility could be used for loans and, subject to a $2.5 million sub-limit, letters of credit, and provided for a commitment fee of 0.375% to 0.5% (0.5% following the Thirteenth Amendment (as defined below)) based on the unused portion of the borrowing base under the Credit Facility. As of March 31, 2020, the borrowing base and lender commitments for the Credit Facility was $290 million. The borrowing base was lowered to $286 million on June 11, 2020 as part of the Thirteenth Amendment. The borrowing base was further lowered to $225 million pursuant to the Forbearance Agreement on July 2, 2020, creating a deficiency between the outstanding amount borrowed under the Company's Credit Facility and the borrowing base. The outstanding balance under the Credit Facility was $285 million as of September 30, 2020 which represents a borrowing deficiency of $60.4 million.

Borrowings under the Credit Facility, at the Company's election, bear interest at either: (i) an alternate base rate (“ABR”) equal to the higher of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5% per annum, and (c) the adjusted LIBO rate of a three-month interest period on such day plus 1.0%; or (ii) the adjusted LIBO rate, which is the rate stated on Reuters screen LIBOR1 page, for one, two, three, six or twelve months, as adjusted for statutory reserve requirements for Eurocurrency liabilities, plus, in each of the cases described in clauses (i) and (ii) above, an applicable margin ranging from 1.0% to 2.0% (2.0% to 3.5% following the Thirteenth Amendment) for ABR loans and from 2.0% to 3.0% (3.0% to 4.5% following the Thirteenth Amendment) for adjusted LIBO rate loans.

Subject to certain permitted liens, the Company's obligations under the Credit Facility are required to be secured by the grant of a first priority lien on no less than 80% of the value of the proved oil and gas properties of the Company and its subsidiaries (currently 100% following the Thirteenth Amendment).

The Company also was not in compliance with the terms of the Credit Facility as of December 31, 2019 because it did not satisfy the consolidated current ratio at those times and the audit report prepared by its auditors with respect to the 2019 financial statements included an explanatory paragraph expressing uncertainty as to the Company's ability to continue as a "going concern." The lenders waived the current ratio default with respect to December 31, 2019. The Company received a forbearance until July 31, 2020 for the defaults in the consolidated current ratio covenant as of the March 31, 2020, and June 30, 2020, measurement dates, the leverage ratio covenant as of the June 30, 2020, measurement date and the missed interest payment under the 11.25% Senior Notes pursuant to the Forbearance Agreement. The Company was not in compliance with the terms of the Credit Facility as of May 15, 2020, because it did not timely deliver its financial statements with respect to the fiscal quarter ended March 31, 2020. Such failure represented a default under the Credit Facility which the lenders waived pursuant to the Thirteenth Amendment. As noted above, the borrowing base was redetermined to $225 million from $286 million pursuant to the Forbearance Agreement on July 2, 2020, which created a deficiency between the outstanding amount borrowed under the Credit Facility and the borrowing base.

Effective April 7, 2020, the Company entered into the Waiver and Eleventh Amendment (the "Waiver") to waive events of default arising from its failure to comply with the consolidated current ratio as of December 31, 2019, to timely provide audited financial statements and to provide financial statements that are not subject to any “going concern” or like qualification or exception for the fiscal year ended December 31, 2019. As there was no guarantee that the Company's lenders would agree to waive events of default or potential events of default in the future, the amounts outstanding under the Credit Facility as of December 31, 2019 are classified as current in the accompanying 2019 Condensed Consolidated Balance Sheet.

Effective May 8, 2020, the Company entered into the Twelfth Amendment to Credit Agreement (the “Twelfth Amendment”), to allow the Company to accept proceeds of up to $2.2 million from an unsecured loan applied for under the CARES Act (as discussed further in Note 1. Basis of Presentation).

Effective June 11, 2020, the Company entered into the Waiver and Thirteenth Amendment to Credit Agreement (the "Thirteenth Amendment") which, among other things, (i) waived any default or event of default arising from its failure to provide timely quarterly financial statements for the three months ended March 31, 2020; (ii) redetermined the borrowing base to $286 million from $290 million; (iii) set the next borrowing base redetermination to be on or around July 1, 2020 (and in any event, no later than July 31, 2020), (iv) amended the borrowing base utilization grid used in the applicable margin, as noted above and (v) until the July 1, 2020 redetermination, restricted the Company and its subsidiaries’ ability to incur debt with respect to, among other items, capital leases and permitted senior debt, grant liens to secure other obligations, pay dividends on LRAI’s preferred stock and make certain investments.

On July 2, 2020, the Company entered into a Forbearance Agreement, Fourteenth Amendment, and Borrowing Base Agreement with Citibank, N.A., as administrative agent and the lenders party thereto (the “Forbearance Agreement”) with respect to the Credit Facility. Pursuant to the Forbearance Agreement, among other things, (i) the lenders under the Credit Facility agreed to refrain from exercising their rights and remedies under the Credit Facility and related loan documents with respect to certain defaults until July 31, 2020, (ii) the borrowing base was redetermined to $225 million from $286 million, (iii) all proceeds of dispositions and terminations or liquidations of swap agreements were to be used to repay the Credit Facility and automatically reduced the borrowing base by the amount of the repayment and (iv) certain exceptions to the covenant restriction on investments were no longer available.

The rights of the lenders to exercise rights and remedies resulted from the Company's failure to comply with the current ratio with respect to the quarter ended March 31, 2020 and the defaults expected with respect to the quarter ending June 30, 2020, under the current ratio and the leverage ratio covenants, and the default with respect to the failure to make the interest payment due on July 1, 2020, under the 11.25% Senior Notes.

On July 31, 2020 the Company and certain of its subsidiaries entered into an amendment with respect to the Forbearance Agreement with the Lenders, pursuant to which the Lenders agreed to extend the stated term of the Forbearance Agreement until August 21, 2020. On August 21, 2020, these parties agreed to further extend the stated term of the Forbearance Agreement until September 11, 2020. The filing of the Chapter 11 Cases resulted in the acceleration of the Credit Facility and the termination of the Forbearance Agreement. However, pursuant to the RSA, the lenders under the Credit Facility agreed to forbear from exercising certain rights and remedies while the RSA remains in full force and effect.

In January 2018, the Company issued $250 million of 11.25% Senior Notes to U.S.-based institutional investors. The net proceeds of $244.4 million were used to fully retire the Company’s 8.75% Senior Notes, which included principal, interest and a prepayment premium of approximately $162 million. The remaining net proceeds were used to reduce borrowings under the Credit Facility.

Prior to default, the 11.25% Senior Notes matured on January 1, 2023, and bore interest at the rate of 11.25% per year, payable on January 1 and July of each year. At any time prior to January 1, 2021, the Company could, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the 11.25% Senior Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 111.25% of the principal amounts redeemed, plus accrued and unpaid interest, provided that at least 65% of the aggregate principal amount of 11.25% Senior Notes originally issued remained outstanding immediately after such redemption and the redemption occurred within 180 days of the closing date of such equity offering.

The indenture contains certain restrictions on the Company’s ability to incur additional debt, pay dividends on the Company’s common stock, make investments, create liens on the Company’s assets, engage in transactions with affiliates, transfer or sell assets, consolidate or merge, or sell substantially all of the Company’s assets. The indenture also contains cross-default provisions for defaults of the Company's other debt instruments, including the Credit Facility, caused by payment default or events which cause the acceleration of repayment prior to the stated maturity of such instrument.

The Company did not make its interest payment on the 11.25% Senior Notes that was due on July 1, 2020 of approximately $14.1 million (the “Payment Default”). Such failure to pay represented a default under the 11.25% Senior Notes and represented an event of default when the Company did not cure within 30 days. The Payment Default was a current event of default under the Credit Facility. The Company entered into the Forbearance Agreement which provided that, among other things, the lenders under the Credit Facility have agreed to forbear the Company’s default of the interest payment until August 21, 2020.

On July 31, 2020, the Company entered into the Notes Forbearance Agreement pursuant to which, among other things, certain holders holding greater than 50% of the 11.25% Senior Notes (i) agreed to refrain from exercising their rights and remedies with respect to the Payment Default and (ii) requested that the trustee not take any remedial action as a result of the Payment Default.

The filing of the Chapter 11 Cases resulted in the termination of the Notes Forbearance Agreement and an event of default and acceleration of the maturity of the 11.25% Senior Notes. However, pursuant to the RSA, certain holders of the 11.25% Senior Notes agreed to forbear from exercising certain rights and remedies while the RSA is in full force and effect.