Note 5 – Long-term Debt

Revolving Credit Facility

The Company and its lenders entered into a Second Amendment to the Fifth Amended and Restated Credit Agreement on December 10, 2014. The Company incurred approximately $3.4 million in deferred financing costs associated with the amendment and extension of this credit facility. As amended, the Company’s credit facility has a maximum loan amount of $2.5 billion, current aggregate lender commitments of $1.5 billion, and a maturity date of December 10, 2019. The borrowing base is subject to regular semi-annual redeterminations. On October 6, 2014, the lending group redetermined the Company's borrowing base under the credit facility and increased it from $2.2 billion to $2.4 billion. The December 10, 2014 amendment to the credit facility specified that the borrowing base was not reduced by the issuance of the 2022 Notes and will remain at $2.4 billion until the next redetermination date, scheduled for April 1, 2015. The borrowing base redetermination process under the credit facility considers the value of the Company’s proved oil and gas properties, as determined by the lender group. Borrowings under the facility are secured by at least 75 percent of the value of the Company’s proved oil and gas properties.

The Company must comply with certain financial and non-financial covenants under the terms of its credit facility agreement, including limitations on dividend payments and requirements to maintain certain financial ratios, which include debt to adjusted EBITDAX, as defined by the Company’s credit agreement as the ratio of debt to 12-month trailing adjusted EBITDAX, of less than 4.0 and an adjusted current ratio, as defined by the Company’s credit agreement, of no less than 1.0. The Company was in compliance with all financial and non-financial covenants under the credit facility as of December 31, 2014, and through the filing date of this report.

Interest and commitment fees are accrued based on the borrowing base utilization grid below. Eurodollar loans accrue interest at the London Interbank Offered Rate plus the applicable margin from the utilization table below, and Alternate Base Rate (“ABR”) and swingline loans accrue interest at Prime plus the applicable margin from the utilization table below. Commitment fees are accrued on the unused portion of the aggregate commitment amount and are included in interest expense in the accompanying statements of operations.

Borrowing Base Utilization Grid



Borrowing Base Utilization Percentage	<25%		≥25% <50%		≥50% <75%		≥75% <90%		≥90%
Eurodollar Loans	1.250	%	1.500	%	1.750	%	2.000	%	2.250	%
ABR Loans or Swingline Loans	0.250	%	0.500	%	0.750	%	1.000	%	1.250	%
Commitment Fee Rate	0.300	%	0.300	%	0.350	%	0.375	%	0.375	%

The following table presents the outstanding balance, total amount of letters of credit, and available borrowing capacity under the Company's credit facility as of February 18, 2015, December 31, 2014, and December 31, 2013:



	As of February 18, 2015		As of December 31, 2014		As of December 31, 2013
	(in thousands)
Credit facility balance	$	341,000	$	166,000	$	—
Letters of credit ⁽¹⁾	$	808	$	808	$	808
Available borrowing capacity	$	1,158,192	$	1,333,192	$	1,299,192

____________________________________________

⁽¹⁾ Letters of credit reduce the amount available under the credit facility on a dollar-for-dollar basis.

Senior Notes

The Senior Notes line on the accompanying balance sheets, as of December 31, 2014, and 2013, consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
2019 Notes	$	350,000	$	350,000
2021 Notes	350,000		350,000
2022 Notes	600,000		—
2023 Notes	400,000		400,000
2024 Notes	500,000		500,000
Total Senior Notes	$	2,200,000	$	1,600,000

The Senior Notes are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and any future unsecured senior debt, and are senior in right of payment to any future subordinated debt. There are no subsidiary guarantors of the Senior Notes. The Company is subject to certain covenants under the indenture governing the Senior Notes that limit the Company’s ability to incur additional indebtedness, issue preferred stock, and make restricted payments, including dividends; provided, however, that the first $6.5 million of dividends paid each year are not restricted by the restricted payment covenant. The Company was in compliance with all covenants under its Senior Notes as of December 31, 2014, and through the filing date of this report.

2022 Notes

On November 17, 2014, the Company issued $600.0 million in aggregate principal amount of 6.125% Senior Notes due 2022. The 2022 Notes were issued at par and mature on November 15, 2022. The Company received net proceeds of $590.0 million after deducting fees of $10.0 million, which are being amortized as deferred financing costs over the life of the 2022 Notes. The net proceeds were used to repay outstanding borrowings under the Company’s credit facility and for general corporate purposes.

Prior to November 15, 2017, the Company may redeem, on one or more occasions, up to 35 percent of the aggregate principal amount of the 2022 Notes with the net cash proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest. The Company may also redeem the 2022 Notes, in whole or in part, at any time prior to November 15, 2018, at a redemption price equal to 100 percent of the principal amount of the 2022 Notes to be redeemed, plus a specified make-whole premium and accrued and unpaid interest to the applicable redemption date.

On or after November 15, 2018, the Company may also redeem all or, from time to time, a portion of the 2022 Notes at the redemption prices set forth below, during the twelve-month period beginning on November 15 of each applicable year, expressed as a percentage of the principal amount redeemed, plus accrued and unpaid interest:



2018	103.063	%
2019	101.531	%
2020 and thereafter	100.000	%

Additionally, on November 17, 2014, the Company entered into a registration rights agreement that provides holders of the 2022 Notes certain registration rights under the Securities Act. Pursuant to the registration rights agreement, the Company is required to file an exchange offer registration statement with the SEC with respect to its offer to exchange the 2022 Notes for substantially identical notes that are registered under the Securities Act. Under certain circumstances, the Company has agreed to file a shelf registration statement relating to the resale of the 2022 Notes in lieu of a registered exchange offer. If the registration statement related to the exchange offer is not declared effective on or before November 17, 2015, or if the shelf registration statement, if required, is not declared effective within the time periods specified in the registration rights agreement, the Company has agreed to pay additional interest with respect to the 2022 Notes in an amount not to exceed one percent of the principal amount of the 2022 Notes until the exchange offer is completed or the shelf registration statement is declared effective.

2024 Notes

On May 20, 2013, the Company issued $500.0 million in aggregate principal amount of 5.0% Senior Notes due 2024. The 2024 Notes were issued at par and mature on January 15, 2024. The Company received net proceeds of $490.2 million after deducting fees of $9.8 million, which are being amortized as deferred financing costs over the life of the 2024 Notes. The net proceeds were used to reduce the Company’s outstanding credit facility balance.

Prior to July 15, 2016, the Company may redeem, on one or more occasions, up to 35 percent of the aggregate principal amount of the 2024 Notes with the net cash proceeds of certain equity offerings at a redemption price of 105% of the principal amount thereof, plus accrued and unpaid interest. The Company may also redeem the 2024 Notes, in whole or in part, at any time prior to July 15, 2018, at a redemption price equal to 100 percent of the principal amount of the 2024 Notes to be redeemed, plus a specified make-whole premium and accrued and unpaid interest to the applicable redemption date.

On or after July 15, 2018, the Company may also redeem all or, from time to time, a portion of the 2024 Notes at the redemption prices set forth below, during the twelve-month period beginning on July 15 of each applicable year, expressed as a percentage of the principal amount redeemed, plus accrued and unpaid interest:



2018	102.500	%
2019	101.677	%
2020	100.833	%
2021 and thereafter	100.000	%

Additionally, on May 20, 2013, the Company entered into a registration rights agreement that provides holders of the 2024 Notes certain registration rights under the Securities Act. The Company closed its offer to exchange its 2024 Notes for notes registered under the Securities Act on June 25, 2014.

2023 Notes

On June 29, 2012, the Company issued $400.0 million in aggregate principal amount of 6.50% Senior Notes due 2023. The 2023 Notes were issued at par and mature on January 1, 2023. The Company received net proceeds of $392.1 million after deducting fees of $7.9 million, which are being amortized as deferred financing costs over the life of the 2023 Notes. The net proceeds were used to reduce the Company’s outstanding credit facility balance.

Prior to July 1, 2015, the Company may redeem, on one or more occasions, up to 35 percent of the aggregate principal amount of the 2023 Notes with the net cash proceeds of certain equity offerings at a redemption price of 106.5% of the principal amount thereof, plus accrued and unpaid interest. The Company may also redeem the 2023 Notes, in whole or in part, at any time prior to July 1, 2017, at a redemption price equal to 100 percent of the principal amount of the 2023 Notes to be redeemed, plus a specified make-whole premium and accrued and unpaid interest to the applicable redemption date.

On or after July 1, 2017, the Company may also redeem all or, from time to time, a portion of the 2023 Notes at the redemption prices set forth below, during the twelve-month period beginning on July 1 of each applicable year, expressed as a percentage of the principal amount redeemed, plus accrued and unpaid interest:



2017	103.250	%
2018	102.167	%
2019	101.083	%
2020 and thereafter	100.000	%

Additionally, on June 29, 2012, the Company entered into a registration rights agreement that provides holders of the 2023 Notes certain registration rights under the Securities Act. The Company satisfied its obligations to exchange its outstanding $400.0 million of its 2023 Notes for notes registered under the Securities Act on October 30, 2012.

2021 Notes

On November 8, 2011, the Company issued $350.0 million in aggregate principal amount of 6.50% Senior Notes due 2021. The 2021 Notes were issued at par and mature on November 15, 2021. The Company received net proceeds of $343.1 million after deducting fees of $6.9 million, which are being amortized as deferred financing costs over the life of the 2021 Notes. The net proceeds were used for general corporate purposes and to reduce the Company’s outstanding credit facility balance.

The Company may redeem the 2021 Notes, in whole or in part, at any time prior to November 15, 2016, at a redemption price equal to 100 percent of the principal amount, plus a specified make-whole premium and accrued and unpaid interest.

The Company may also redeem all or, from time to time, a portion of the 2021 Notes on or after November 15, 2016, at the prices set forth below, during the twelve-month period beginning on November 15 of the applicable year, expressed as a percentage of the principal amount redeemed, plus accrued and unpaid interest:



2016	103.250	%
2017	102.167	%
2018	101.083	%
2019 and thereafter	100.000	%

Additionally, on November 8, 2011, the Company entered into a registration rights agreement that provides holders of the 2021 Notes certain registration rights for the 2021 Notes under the Securities Act. The Company satisfied its obligations to exchange its outstanding $350.0 million of its 2021 Notes for notes registered under the Securities Act on March 7, 2012.

2019 Notes

On February 7, 2011, the Company issued $350.0 million in aggregate principal amount of 6.625% Senior Notes due 2019. The 2019 Notes were issued at par and mature on February 15, 2019. The Company received net proceeds of $341.1 million after deducting fees of $8.9 million, which are being amortized as deferred financing costs over the life of the 2019 Notes. The net proceeds were used to repay borrowings under the Company’s credit facility, to fund the Company’s ongoing capital expenditure program, and for general corporate purposes.

The Company may redeem all or, from time to time, a portion of the 2019 Notes on or after February 15, 2015, at the prices set forth in the table below, during the twelve-month period beginning on February 15 of the applicable year, expressed as a percentage of the principal amount redeemed, plus accrued and unpaid interest:



2015	103.313	%
2016	101.656	%
2017 and thereafter	100.000	%

Additionally, on February 7, 2011, the Company entered into a registration rights agreement that provides holders of the 2019 Notes certain registration rights for the 2019 Notes under the Securities Act. The Company satisfied its obligations to exchange its outstanding $350.0 million of its 2019 Notes for notes registered under the Securities Act on January 11, 2012.

3.50% Senior Convertible Notes

On April 2, 2012, the Company called for redemption all of its outstanding 3.50% Senior Convertible Notes. The call for redemption resulted in holders of $281.3 million aggregate principal amount electing to convert their notes. The Company settled the principal amount of all converted 3.50% Senior Convertible Notes in cash and settled the excess conversion value by issuing 864,106 shares of its common stock. The Company redeemed the remaining $6.2 million of aggregate principal amount of notes that were not converted on the redemption date at par plus accrued interest in cash. The Company used funds borrowed under its credit facility to pay the cash portion of the settlement.

Capitalized Interest

Capitalized interest costs for the Company for the years ended December 31, 2014, 2013, and 2012, were $16.2 million, $11.0 million, and $12.1 million, respectively.