⛽️Oil & Gas Continues to Be a Free-for-All (Long Houston’s Restaurant Scene)⛽️

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Speaking of borrowing bases and being f*cked, there’s also Alta Mesa Holdings LP(“AMH”), a Houston-based E&P company focused on the Anadarko stack. See, the funny thing about asset-backed loans is that when the asset quality deteriorates, a bank, to no one’s surprise, wants to reduce its credit exposure and borrower risk. This is why lenders bake in “redetermination rights” into their credit documents; they want the flexibility to ratchet down their commitment to a borrower should the borrower, say, sh*t the bed in a big big way. 

In case you haven’t been paying attention, oil and gas, as an industry, has been sh*tting the bed in a big BIG way. 

Hence, Alta Mesa’s SEC filing earlier this week that it received notice pursuant to its credit agreement, that the borrowing base has been reduced from $370mm to $200mm. YIKES. 

Let’s, for sh*ts and giggles, parse out the filing, shall we? 

“AMH’s combined borrowings and letters of credit outstanding exceed the new borrowing base by $162.4 million.” 

PETITION Note: Ruh roh. Just like that, the lenders have put the squeeze on AMH. AMH meet world of hurt. World of hurt, meet AMH.

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Oil and Gas Continues to Crack

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Long Houston-Based Hotels

The bankruptcy waiting room is becoming standing room only for oil and gas companies despite oil resting near 2019 highs (even after a rough 2% decline on Friday). We’ve previously mentioned Jones Energy ($JONE), Sanchez Energy Corporation ($SN), Southcross Energy Partners LP ($SXEE), Vanguard Natural Resources, Alta Mesa Holdings LP ($AMR) and Chaparral Energy Inc. ($CHAP) in “⛽️Is Oil & Gas Distress Back?⛽️.” Based on earnings reports or other SEC filings this week, add Emerge Energy Services LP ($EMES), EP Energy Corporation ($EPE) and Approach Resources Inc. ($AREX) to the list.

Emerge Energy Services experienced some wild stock fluctuation this week after it filed a Form 12b-25 with the SEC indicating that was unable to timely file its FY 2018 Form 10K. Therein, the company stated that it has been distracted by negotiations with its revolving credit facility agent, PNC Bank NA, and second lien note purchase agreement agent, HPS Investment Partners LLC, on several forbearance agreements and amendments to the two agreements. Tee this baby up for a potential BK.

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