Stone Energy Taps Credit Facility for $385 Million

Stone Energy has drawn down the entirety of its credit facility, amounting to $500 million total, which will now summarily burn in a giant flaming barrel of garbage.

Stone Energy Corporation (NYSE: SGY) today announced that it has borrowed $385 million under Stone’s Bank Credit Facility, which represents substantially all of the remaining undrawn amount that was available under the Credit Facility. These funds are intended to be used for general corporate purposes. As of March 10, 2016, following the funding of this borrowing, the aggregate principal amount of borrowings under the Credit Facility was $477 million. This is in addition to approximately $19 million of outstanding letters of credit. The bank borrowings will initially bear an interest rate of approximately 5 percent. On March 10, 2016, the banks provided notice to Stone under the Credit Facility of a request for a borrowing base redetermination. Stone expects that the borrowing base will be reduced to an amount below the current borrowings.

Chairman, President and Chief Executive Officer David Welch stated, “We felt it important to increase our liquidity in the current low price commodity environment to ensure we have adequate financial flexibility. We will continue to explore various options to strengthen our balance sheet, including alternatives to address our debt position.”

This, undoubtedly, is going to tighten credit at the banks, as oil and gas companies draw down on their credit facilities in record fashion. It’s like a giant run on the banks, all at once.

The bank group includes Bank of America, N.A. as administrative agent; BNP Paribas, Natixis, and the Bank of Nova Scotia as syndication agents; Capital One, N.A. and Toronto Dominion LLC as documentation agents; and Allied Irish Banks p.l.c., Barclays Bank PLC, Regions Bank, U.S. Bank, Whitney National Bank, JPMorgan Chase Bank, N.A. and Sumitomo Mitsui Banking Corporation as participating banks.

Fucked.