Long-Term Debt

6 Months Ended

Jun. 30, 2019

Note 5 - Long-Term Debt

Credit Agreement

The Company’s Sixth Amended and Restated Credit Agreement, as amended (the “Credit Agreement”), provides for a senior secured revolving credit facility with a maximum loan amount of $2.5 billion. On April 18, 2019, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”) with its lenders. Pursuant to the First Amendment, and as part of the regular, semi-annual borrowing base redetermination process, the borrowing base and aggregate lender commitments were increased from $1.5 billion and $1.0 billion, respectively, to $1.6 billion and $1.2 billion, respectively. The borrowing base increase was primarily driven by the increased value of the Company’s estimated proved reserves at December 31, 2018. The next scheduled borrowing base redetermination date is October 1, 2019.

The Credit Agreement is scheduled to mature on September 28, 2023. The maturity date could, however, occur earlier on August 16, 2022, if the Company has not completed certain repurchase, redemption, or refinancing activities associated with its 6.125% Senior Notes due 2022 (“2022 Senior Notes”), as outlined in the Credit Agreement. 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, 2019, and through the filing of this report. Please refer to Note 5 - Long-Term Debt in the 2018 Form 10-K for additional detail on the terms of the Company’s Credit Agreement.

Interest and commitment fees associated with the credit facility 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 Company’s 2018 Form 10-K. At the Company’s election, borrowings under the Credit Agreement may be in the form of Eurodollar, Alternate Base Rate (“ABR”), or Swingline loans. Eurodollar loans accrue interest at the London Interbank Offered Rate, plus the applicable margin from the utilization grid, and ABR and Swingline loans accrue interest at a market-based floating 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 the interest expense line item on 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 23, 2019, June 30, 2019, and December 31, 2018:



	As of July 23, 2019		As of June 30, 2019		As of December 31, 2018
	(in thousands)
Credit facility balance ⁽¹⁾	$	126,000	$	118,000	$	—
Letters of credit ⁽²⁾	—		—		200
Available borrowing capacity	1,074,000		1,082,000		999,800
Total aggregate lender commitment amount	$	1,200,000	$	1,200,000	$	1,000,000

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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 $6.7 million and $6.4 million as of June 30, 2019, and December 31, 2018, respectively. These costs are being amortized over the term of the credit facility on a straight-line basis.


⁽²⁾	Letters of credit outstanding reduce the amount available under the credit facility on a dollar-for-dollar basis. The letter of credit outstanding as of December 31, 2018, was released during the three months ended March 31, 2019.

Senior Notes

As of June 30, 2019, the Company’s senior notes consisted of 6.125% Senior Notes due 2022, 5.0% Senior Notes due 2024, 5.625% Senior Notes due 2025, 6.75% Senior Notes due 2026, and 6.625% Senior Notes due 2027 (collectively referred to as “Senior Notes”). The Senior Notes, net of unamortized deferred financing costs line item on the accompanying balance sheets as of June 30, 2019, and December 31, 2018, consisted of the following:



	As of June 30, 2019						As of December 31, 2018
	Principal Amount		Unamortized Deferred Financing Costs		Principal Amount, Net of Unamortized Deferred Financing Costs		Principal Amount		Unamortized Deferred Financing Costs		Principal Amount, Net of Unamortized Deferred Financing Costs
	(in thousands)
6.125% Senior Notes due 2022	$	476,796	$	3,420	$	473,376	$	476,796	$	3,921	$	472,875
5.0% Senior Notes due 2024	500,000		4,227		495,773		500,000		4,688		495,312
5.625% Senior Notes due 2025	500,000		5,356		494,644		500,000		5,808		494,192
6.75% Senior Notes due 2026	500,000		5,989		494,011		500,000		6,407		493,593
6.625% Senior Notes due 2027	500,000		7,067		492,933		500,000		7,533		492,467
Total	$	2,476,796	$	26,059	$	2,450,737	$	2,476,796	$	28,357	$	2,448,439

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, 2019, 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 2018 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, 2019, 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, 2019, 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 $2.7 million and $2.6 million for the three months ended June 30, 2019, and 2018, respectively, and totaled $5.4 million and $5.2 million for the six months ended June 30, 2019, and 2018, 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 since issuance. The Senior Convertible Notes, net of unamortized discount and deferred financing costs line on the accompanying balance sheets as of June 30, 2019, and December 31, 2018, consisted of the following:



	As of June 30, 2019			As of December 31, 2018
	(in thousands)
Principal amount of Senior Convertible Notes	$	172,500		$	172,500
Unamortized debt discount	(18,162		)	(22,313		)
Unamortized deferred financing costs	(1,835		)	(2,293		)
Senior Convertible Notes, net of unamortized discount and deferred financing costs	$	152,503		$	147,894

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, 2019, and through the filing of this report.

Capitalized Interest

Capitalized interest costs for the three months ended June 30, 2019, and 2018, were $5.0 million and $6.0 million, respectively, and for the the six months ended June 30, 2019, and 2018, were $9.9 million and $10.5 million, respectively. The amount of interest the Company capitalizes generally fluctuates based on its capital program and the timing and amount of costs associated with capital projects that are considered in progress.