XML 21 R11.htm IDEA: XBRL DOCUMENT

Note 4 - Long-term Debt

6 Months Ended

Jun. 30, 2022

4. Long-Term Debt

The following is a description of our debt as of June 30, 2022 and December 31, 2021 (in thousands):

	*June 30, 2022*			*December 31, 2021*

First Lien Credit Facility	$	-		$	71,400
Second Lien Credit Facility		-			134,907
Exit fee - Second Lien Credit Facility		-			10,000
Real estate lien note		2,362			2,515
Total long term debt		2,362			218,822
Less current maturities		(318	)		(212,688	)
		2,044			6,134
Deferred financing fees and debt issuance cost, net		-			(3,929	)
Total long-term debt, net of deferred financing fees and debt issuance costs	$	2,044		$	2,205

Restructuring

Pursuant to the Exchange Agreement, dated as of January 3, 2022, between Abraxas and AGEF and certain other agreements entered into by Abraxas on January 3, 2022, we effectuated a restructuring of our then-existing indebtedness through a multi-part interdependent de levering transaction consisting of: (i) an Asset Purchase and Sale Agreement pursuant to which Abraxas sold to Lime Rock Resources V-A, L.P. certain oil, gas, and mineral properties in the Williston Basin region of North Dakota and other related assets belonging to the Company and its subsidiaries for $87,200,000 in cash ($70.3 million after customary closing adjustments) (the “Sale”), (ii) the pay down of the indebtedness and other obligations of Abraxas and its subsidiaries under the First Lien Credit Facility, by and among Abraxas, the financial institutions party thereto as lenders, and Société Générale, as “Issuing Lender” and administrative agent and certain specified secured hedges from the proceeds of the Sale and, to the extent necessary, other cash of Abraxas, and (iii), a debt for equity exchange of the indebtedness and other obligations of Abraxas and its subsidiaries under the Second Lien Credit Facility, by and among Abraxas, the financial institutions party thereto as lenders, and Angelo Gordon Energy Servicer, LLC, as administrative agent and all related loan and security documents (the “Exchange” and, together with the transactions referred to in clauses (i) and (ii), the “Restructuring”).

AGEF was issued 685,505 shares of Series A Preferred Stock of the Company in the Exchange. The Series A Preferred Stock has the terms set forth in the Company’s filed Preferred Stock Certificate of Designation (the “Certificate). Pursuant to the Certificate, any proceeds distributed to the Company’s stockholders or otherwise received in respect of the capital stock of the Company in a merger or other liquidity event will be allocated among the Series A Preferred Stock and the Company’s common stock as follows: (1) first, 100% to the Series A Preferred Stock until the Series A Preferred Stock has received $100 million of proceeds in the aggregate (the “Tier One Preference Amount”), (2) second, 95% to the Series A Preferred Stock and 5% to the Company’s common stock until the Series A Preferred Stock has received $137.1 million, plus a 6.0% annual rate of return thereon from the date of issuance; (3) thereafter, 75% to the Series A Preferred Stock and 25% to the Company’s common stock. The Exchange Agreement entered into in connection with the Restructuring also provides for the potential funding by AGEF of an additional amount up to $12.0 million, if agreed to by AGEF and the disinterested members of the Company’s Board of Directors. Any such additional amount funded would result in an increase to the Tier One Preference Amount equal to 1.5 x the amount of such additional funding. The shares of Series A Preferred Stock vote together as a single class with the Company’s common stock, and each share of Series A Preferred Stock entitles the holder thereof to 69 votes. Accordingly, AGEF’s ownership of the Series A Preferred Stock entitle it to approximately 85% of the voting power of the Company’s current outstanding capital stock.

The Restructuring also involved a change in a majority of the Board’s directors. Pursuant to the Exchange Agreement, immediately prior to the closing of the Restructuring, two former Board members resigned. Immediately after the consummation of the Restructuring, the existing Board members resolved to increase the size of the Board by one member and to appoint three employees of AGEF as members of the Board, one of whom became Chairman of the Board.

As a result of the Restructuring, AGEF has the power to exert significant control over the Company by controlling both the majority of the voting power of the Company’s outstanding capital stock and the composition of a majority of the Company’s Board.

Real Estate Lien Note

We have a real estate lien note secured by a first lien deed of trust on the property and improvements which serves as our corporate headquarters. The outstanding principal accrues interest at a fixed rate of 4.9%. The note is payable in monthly installments of principal and accrued interest in the amount of $35,672. The maturity date of the note is July 20, 2023. As of June 30, 2022 and December 31, 2021, $2.4 million and $2.5 million, respectively, were outstanding on the note.

The real estate lien note was paid in full on August 3, 2022.