UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): SEPTEMBER 30, 2004
CARRIZO OIL & GAS, INC.
(Exact name of registrant as specified in its charter)
Texas 000-22915 76-0415919
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
14701 St. Mary's Lane
Suite 800
Houston, Texas 77079
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (281) 496-1352
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September 30, 2004, Carrizo Oil & Gas, Inc. (the "Company"
or "we") entered into a Second Amended and Restated Credit Agreement with
Hibernia National Bank and Union Bank of California, N.A. (the "Credit
Facility"), which matures on September 30, 2007. The Credit Facility amends,
restates and extends our prior credit facility (such prior facility herein
referred to as the "Prior Credit Facility"). The Credit Facility provides for
(1) a revolving line of credit of up to the lesser of the Facility A Borrowing
Base and $75.0 million and (2) a term loan facility of up to the lesser of the
Facility B Borrowing Base and $25.0 million. It is secured by substantially all
of our assets and is guaranteed by our subsidiary.
The changes from the Prior Credit Facility include, without
limitation, (1) an increase in the facility amount, (2) an extension of the
maturity date from January 31, 2006 to September 30, 2007, (3) the addition of
Union Bank of California, N.A. as a lender, (4) provisions permitting the
incurrence of up to $25 million of second-lien subordinated debt with another
lender (the "Secured Subordinated Debt"), (5) the ability to own and operate
unrestricted subsidiaries, (6) the addition of a maximum total recourse debt to
EBITDA ratio, and (7) the substitution of a required minimum shareholders equity
covenant for a prior minimum tangible net worth requirement.
The Facility A Borrowing Bases will be determined by the
lenders at least semi-annually on each November 1 and May 1. The initial
Facility A Borrowing Base is $28.0 million. The initial Facility B Borrowing
Base is $0.00 and is subject to determination by the lenders in their sole
discretion. We and the lenders may each request one unscheduled borrowing base
determination subsequent to each scheduled determination. The Facility A
Borrowing Base will at all times equal the Facility A Borrowing Base most
recently determined by the lenders, less quarterly borrowing base reductions
required subsequent to such determination. The lenders will reset the Facility A
Borrowing Base amount at each scheduled and each unscheduled borrowing base
determination date.
If the outstanding principal balance of the revolving loans
under the Credit Facility exceeds the Facility A Borrowing Base at any time
(including, without limitation, due to a quarterly borrowing base reduction (as
described above)), we have the option within 30 days to take any of the
following actions, either individually or in combination: make a lump sum
payment curing the deficiency, pledge additional collateral sufficient in the
lenders' opinion to increase the Facility A Borrowing Base and cure the
deficiency or begin making equal monthly principal payments that will cure the
deficiency within the ensuing six-month period. Those payments would be in
addition to any payments that may come due as a result of the quarterly
borrowing base reductions. Otherwise, any unpaid principal or interest will be
due at maturity.
For each revolving loan, the interest rate will be, at our
option, (1) the Eurodollar Rate, plus an applicable margin equal to 2.375% if
the amount borrowed is greater than or equal to 90% of the Facility A Borrowing
Base, 2.0% if the amount borrowed is less than 90%, but greater than or equal to
50% of the Facility A Borrowing Base, or 1.625% if the amount
borrowed is less than 50% of the Facility A Borrowing Base; or (2) the Base
Rate, plus an applicable margin of 0.375% if the amount borrowed is greater than
or equal to 90% of the Facility A Borrowing Base. The interest rate on each term
loan will be, at our option, (1) the Eurodollar Rate, plus an applicable margin
to be determined by the lenders; or (2) the Base Rate, plus an applicable margin
to be determined by the lenders. Interest on Eurodollar Loans is payable on
either the last day of each Eurodollar option period or monthly, whichever is
earlier. Interest on Base Rate Loans is payable monthly.
We are subject to certain covenants under the terms of the
Credit Facility, including, but not limited to the maintenance of the following
financial covenants: (1) a minimum current ratio of 1.0 to 1.0 (including
availability under the borrowing base), (2) a minimum quarterly debt services
coverage of 1.25 times, (3) a minimum shareholders equity equal to $100.0
million, plus 100% of all subsequent common and preferred equity contributed by
shareholders subsequent to June 30, 2004, plus 50% of all positive earning
occurring subsequent to June 30, 2004, plus, 180 days after issuance of any
Secured Subordinated Debt, an amount equal to the difference, if positive, of
(A) 50% of the net proceeds from the issuance less (B) 100% of all common and
preferred equity contributed by shareholders from September 30, 2004 to the date
of the issuance of any Secured Subordinated Debt, and (4) a maximum total
recourse debt to EBITDA ratio of not more than 3.0 to 1.0. The Credit Facility
also places restrictions on additional indebtedness, dividends to stockholders,
liens, investments, mergers, acquisitions, asset dispositions, asset pledges and
mortgages, change of control, repurchase or redemption for cash of our common
stock, speculative commodity transactions and other matters.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit Number Description
-------------- -----------
10.1 Second Amended and Restated Credit Agreement dated as of
September 30, 2004 by and among Carrizo Oil & Gas, Inc.,
CCBM, Inc., Hibernia National Bank, as Agent, Union Bank
of California, N.A., as co-agent and Hibernia National
Bank and Union Bank of California, N.A., as lenders
10.2 Commercial Guaranty made and entered into as of September
30, 2004 by CCBM, Inc. in favor of Hibernia National Bank,
as agent
10.3 Amended and Restated Stock Pledge and Security Agreement
dated and effective as of September 30, 2004 by Carrizo
Oil & Gas, Inc. in favor of Hibernia National Bank, as
agent
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CARRIZO OIL & GAS, INC.
By: /s/ Paul F. Boling
------------------
Name: Paul F. Boling
Title: Vice President and
Chief Financial Officer
Date: October 6, 2004
INDEX TO EXHIBITS
Exhibit Number Description
-------------- -----------
10.1 Second Amended and Restated Credit Agreement dated as of
September 30, 2004 by and among Carrizo Oil & Gas, Inc.,
CCBM, Inc., Hibernia National Bank, as Agent, Union Bank
of California, N.A., as co-agent and Hibernia National
Bank and Union Bank of California, N.A., as lenders
10.2 Commercial Guaranty made and entered into as of September
30, 2004 by CCBM, Inc. in favor of Hibernia National Bank,
as agent
10.3 Amended and Restated Stock Pledge and Security Agreement
dated and effective as of September 30, 2004 by Carrizo
Oil & Gas, Inc. in favor of Hibernia National Bank, as
agent