Eclipse Resources said last week it expects to record a fourth-quarter impairment charge of $750-$850 million on certain Ohio oil and gas properties, due primarily to the huge commodity-price decline.
The estimated impairment charge remains subject to revision based upon further analysis and final review, the independent producer said.
Eclipse added it doesn’t anticipate the expected impairment will result in a violation of any financial covenants associated with its senior secured revolving credit facility or senior unsecured bonds.
In other Eclipse news, the State College, Pennsylvania-based company last Thursday began a private offer to exchange $550 million of outstanding 8.875% senior unsecured notes due in 2023, for the company’s new 9% senior secured second-lien notes due in 2023.
The exchange offer expires on Feb. 18, unless extended by Eclipse, Kallanish Energy learns. The settlement date is Feb. 19.
The second-lien notes will be initially secured by second-priority liens on substantially all of Eclipse’s and any subsidiary guarantors’ assets.
The liens securing the second-lien notes and related subsidiary guarantees will be subordinated to the liens on assets securing the Eclipse’s revolving credit facility and certain hedging and bank product obligations.
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