Note 5 - Long-Term Debt

Credit Agreement

The Company’s Fifth Amended and Restated Credit Agreement, as amended, (the “Credit Agreement”) provides for a maximum loan amount of $2.5 billion and has a maturity date of December 10, 2019. On April 24, 2018, as part of the regular, semi-annual borrowing base redetermination process, the borrowing base and aggregate lender commitments were increased to $1.4 billion and $1.0 billion, respectively. Upon completion of the Divide County Divestiture on May 30, 2018, the Company’s borrowing base was reduced to $1.3 billion, while the aggregate lender commitments remained at $1.0 billion. Please refer to Note 3 - Divestitures, Assets Held for Sale, and Acquisitions for additional discussion on the sale of these assets. The next scheduled redetermination date is October 1, 2018.

The Company must comply with certain financial and non-financial covenants under the terms of the Credit Agreement and was in compliance with all such covenants as of June 30, 2018, and through the filing of this report.

Interest and commitment fees are accrued based on a borrowing base utilization grid set forth in the Credit Agreement as presented in Note 5 - Long-Term Debt in the 2017 Form 10-K. Eurodollar loans accrue interest at the London Interbank Offered Rate, plus the applicable margin from the utilization grid, and Alternate Base Rate and swingline loans accrue interest at the prime rate, plus the applicable margin from the utilization grid. Commitment fees are accrued on the unused portion of the aggregate lender commitment amount at rates from the utilization grid and are included in interest expense in the accompanying statements of operations.

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of July 25, 2018, June 30, 2018, and December 31, 2017:



	As of July 25, 2018		As of June 30, 2018		As of December 31, 2017
	(in thousands)
Credit facility balance ⁽¹⁾	$	—	$	—	$	—
Letters of credit ⁽²⁾	200		200		200
Available borrowing capacity	999,800		999,800		924,800
Total aggregate lender commitment amount	$	1,000,000	$	1,000,000	$	925,000

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⁽¹⁾	Unamortized deferred financing costs attributable to the credit facility are presented as a component of other noncurrent assets on the accompanying balance sheets and totaled $2.4 million and $3.1 million as of June 30, 2018, and December 31, 2017, respectively.


⁽²⁾	Letters of credit outstanding reduce the amount available under the credit facility on a dollar-for-dollar basis.

Senior Notes

The Company’s Senior Notes consist of 6.50% Senior Notes due 2021, 6.125% Senior Notes due 2022, 6.50% Senior Notes due 2023, 5.0% Senior Notes due 2024, 5.625% Senior Notes due 2025, and 6.75% Senior Notes due 2026 (collectively referred to as “Senior Notes”). On June 15, 2018, the Company called for redemption all of its 6.50% Senior Notes due 2021 (“2021 Senior Notes”) at a redemption price of 102.167% of the principal amount, plus accrued and unpaid interest on the principal amount of the 2021 Senior Notes to be redeemed (“2021 Senior Notes Redemption”). As a result of the 2021 Senior Notes Redemption, the 2021 Senior Notes, net of unamortized deferred financing costs, were classified as a current liability on the accompanying balance sheets as of June 30, 2018. On July 16, 2018, the Company completed the 2021 Senior Notes Redemption, which resulted in the payment of total consideration, including accrued interest, of $355.9 million. The Company will record a loss on extinguishment of debt of $9.8 million for the quarter ended September 30, 2018. This amount will include $7.5 million associated with the premium paid for the 2021 Senior Notes Redemption and $2.3 million related to the acceleration of unamortized deferred financing costs.

The current portion of Senior Notes, net of unamortized deferred financing costs and noncurrent portion of Senior Notes, net of unamortized deferred financing costs lines on the accompanying balance sheets as of June 30, 2018, and December 31, 2017, consisted of the following:



	As of June 30, 2018						As of December 31, 2017
	Principal Amount		Unamortized Deferred Financing Costs		Senior Notes, Net of Unamortized Deferred Financing Costs		Principal Amount		Unamortized Deferred Financing Costs		Senior Notes, Net of Unamortized Deferred Financing Costs
	(in thousands)
6.50% Senior Notes due 2021	$	344,611	$	2,310	$	342,301	$	344,611	$	2,656	$	341,955
6.125% Senior Notes due 2022	561,796		5,211		556,585		561,796		5,800		555,996
6.50% Senior Notes due 2023	394,985		3,342		391,643		394,985		3,707		391,278
5.0% Senior Notes due 2024	500,000		5,149		494,851		500,000		5,610		494,390
5.625% Senior Notes due 2025	500,000		6,261		493,739		500,000		6,714		493,286
6.75% Senior Notes due 2026	500,000		6,824		493,176		500,000		7,242		492,758
Total	$	2,801,392	$	29,097	$	2,772,295	$	2,801,392	$	31,729	$	2,769,663

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 indentures governing the Senior Notes and was in compliance with all such covenants as of June 30, 2018, and through the filing of this report. The Company may redeem some or all of its Senior Notes prior to their maturity at redemption prices based on a premium, plus accrued and unpaid interest as described in the indentures governing the Senior Notes.

Senior Convertible Notes

The Company’s Senior Convertible Notes consist of $172.5 million in aggregate principal amount of 1.50% Senior Convertible Notes due July 1, 2021 (the “Senior Convertible Notes”). The Senior Convertible 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. Please refer to Note 5 - Long-Term Debt in the 2017 Form 10-K for additional detail on the Company’s Senior Convertible Notes and associated capped call transactions.

The Senior Convertible Notes were not convertible at the option of holders as of June 30, 2018, or through the filing of this report. Notwithstanding the inability to convert, the if-converted value of the Senior Convertible Notes as of June 30, 2018, did not exceed the principal amount. The debt discount and debt-related issuance costs are amortized to the principal value of the Senior Convertible Notes as interest expense through the maturity date of July 1, 2021. Interest expense recognized on the Senior Convertible Notes related to the stated interest rate and amortization of the debt discount totaled $2.6 million and $2.5 million for the three months ended June 30, 2018, and 2017, respectively, and totaled $5.2 million and $4.9 million for the six months ended June 30, 2018, and 2017, respectively.

There have been no changes to the initial net carrying amount of the equity component of the Senior Convertible Notes recorded in additional paid-in capital on the accompanying balance sheets. The Senior Convertible Notes, net of unamortized discount and deferred financing costs line on the accompanying balance sheets as of June 30, 2018, and December 31, 2017, consisted of the following:



	As of June 30, 2018			As of December 31, 2017
	(in thousands)
Principal amount of Senior Convertible Notes	$	172,500		$	172,500
Unamortized debt discount	(26,319		)	(30,183		)
Unamortized deferred financing costs	(2,751		)	(3,210		)
Senior Convertible Notes, net of unamortized discount and deferred financing costs	$	143,430		$	139,107

The Company is subject to certain covenants under the indenture governing the Senior Convertible Notes and was in compliance with all such covenants as of June 30, 2018, and through the filing of this report.