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Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies  
Summary of contractual obligations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ending December 31,

 

 

    

2015

    

2016

    

2017

    

2018

    

2019

    

Thereafter

    

Total

 

Senior secured revolving credit facility (1)

 

$

545.0 

 

$

 —

 

$

 

$

 

$

 —

 

$

 

$

545.0 

 

Term Loan Facility (1)

 

 

700.0 

 

 

 —

 

 

 

 

 

 

 —

 

 

 

 

700.0 

 

2017 Senior Notes (2)

 

 

396.9 

 

 

 —

 

 

 —

 

 

 

 

 —

 

 

 

 

396.9 

 

2019 Senior Notes (2)

 

 

621.6 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

 

621.6 

 

2020 Senior Notes (2)

 

 

243.6 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

243.6 

 

Drilling rig commitments (3)

 

 

21.7 

 

 

21.6 

 

 

11.8 

 

 

 —

 

 

 

 

 —

 

 

55.1 

 

Office and equipment leases

 

 

8.0 

 

 

3.6 

 

 

1.6 

 

 

1.7 

 

 

1.7 

 

 

6.2 

 

 

22.8 

 

Operating commitments (4)

 

 

11.5 

 

 

16.8 

 

 

8.4 

 

 

4.8 

 

 

3.2 

 

 

10.0 

 

 

54.7 

 

Legal obligations (5)

 

 

29.0 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

29.0 

 

Other (6)

 

 

14.8 

 

 

4.7 

 

 

4.6 

 

 

4.5 

 

 

4.4 

 

 

63.0 

 

 

96.0 

 

Total

 

$

2,592.1 

 

$

46.7 

 

$

26.4 

 

$

11.0 

 

$

9.3 

 

$

79.2 

 

$

2,764.7 

 


(1)

Includes outstanding principal amounts at December 31, 2014. This table does not include future commitment fees, interest expense or other fees on these facilities because they are floating rate instruments and Sabine cannot determine with accuracy the timing of future loan advances, repayments or future interest rates to be charged. As of December 31, 2014, the New Revolving Credit Facility and Term Loan Facility had weighted average interest rates of 2.40% and 8.75%, respectively. For more information on the classification of debt, please see Note 2 herein.

(2)

2017 Notes include interest at a rate of 9.75% per annum, payable semi-annually on February 15 and August 15. 2019 Notes include interest at a rate of 7.25% per annum, payable semi-annually on June 15 and December 15. 2020 Notes include interest at a rate of 7.50% per annum, payable semi-annually on March 15 and September 15. For more information on the classification of debt, please see Note 2 herein.

(3)

At December 31, 2014, Sabine had one drilling rig under contract which expires in 2016 and two drilling rigs under contracts which expire in 2017 and are reflected in the values in the table. Any other rig performing work for Sabine is doing so on a well-by-well basis and therefore can be released without penalty at the conclusion of drilling on the current well. These types of drilling obligations have not been included in the table above. The values in the table represent the gross amounts that Sabine is committed to pay. However, Sabine will record in the financials its proportionate share based on its working interest.

(4)

Operating commitments consist of committed production and development activities. The gas and condensate gathering agreements for the transportation and processing of natural gas and condensate cover certain properties with contractually obligated annual minimum volume commitments of gas and condensate. Under the terms of the agreements, we are required to make annual deficiency payments for any shortfalls in delivering the minimum volumes under these commitments. The drilling commitment requires an annual minimum of one well be drilled each year through May 2, 2017. Under the terms of the agreement, we are required to purchase the associated gathering facilities should this commitment not be met.

(5)

From time to time, the Company may be a plaintiff or defendant in a pending or threatened legal proceeding arising in the normal course of its business. All known liabilities are accrued when probable and reasonably estimable based on the Company’s best estimate of the potential loss. While the outcome and impact of currently pending legal proceedings cannot be predicted with certainty, the Company’s management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on the Company’s consolidated operating results, financial position or cash flows. As of December 31, 2014, there were $29 million of outstanding letters of credit, including $25 million reserved for litigation and $4 million reserved for other purposes incidental to the Company’s normal course of business.

Other is comprised primarily of pension and other postretirement benefit obligations, asset retirement obligations and future settlements of deferred service charges, for which neither the ultimate settlement amounts nor the timing of settlement can be precisely determined in advance. See “Critical Accounting Policies, Estimates, Judgments, and Assumptions” in this Annual Report on Form 10-K for a more detailed discussion of the nature of the accounting estimates involved in estimating asset retirement obligations.