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SEC Filings

AZURE MIDSTREAM PARTNERS, LP filed this Form 8-K on 03/21/2017
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IDR Units (comprising 10% of all outstanding IDR Units) to the Partnership; and (v) the parties to the AES Settlement released each other from all claims relating to the AES Service Agreements and certain other related claims.


7.                                      The Panola and Murvaul Sale


By the fourth quarter of 2016, as described below, the Debtors had been operating under default waivers of certain leverage covenants in the Credit Agreement for nearly 15 months.  The Debtors sought to come into compliance with their Consolidated Total Leverage Ratio, as defined in the Credit Agreement by increasing their EBITDA through the elimination of fixed operating costs and reducing outstanding debt.  To that end, on August 4, 2016, Marlin Midstream entered into an agreement for the sale to AMP ETX Gathering, LLC of (a) a 51.1 mile piece of natural gas pipeline, including related compression and gathering facilities and associated tracts of real property, surface leases, easements, and rights-of-way, located in Panola and Rusk Counties, Texas (the “Murvaul System”) and (b) a 100 MMcf/d natural gas processing plant located in Panola County Texas (“Panola I”) for an agreed purchase price of $44.9 million in cash, less certain agreed-upon adjustments in respect of ad valorem taxes.  The Debtors used $41 million of the sale proceeds to pay down outstanding debt under the Prepetition Credit Facility.  The Debtors estimate that sale of the Murvaul System and Panola I increased annual EBITDA by about $1.5 million through fixed expense reductions associated therewith.


8.                                      Prepetition Indebtedness


a.                                      The Prepetition Credit Agreement and Prepetition Credit Facility


The Debtors are parties to that certain credit agreement, dated as of February 27, 2015 (as amended from time to time, the “Prepetition Credit Agreement,” and the senior secured revolving credit facility thereunder, the “Prepetition Credit Facility”), by and among Azure, all of its Debtor subsidiaries, as guarantors, Wells Fargo Bank, N.A., as administrative agent (the “Administrative Agent”), and certain lenders thereto.  The Prepetition Credit Facility provides a total borrowing capacity of up to $250 million.  Borrowings under the Prepetition Credit Facility bear interest at:  (i) the LIBOR Rate, as defined in the Prepetition Credit Agreement, plus an applicable margin of 3.25% to 4.25%; or (ii) the Base Rate, as defined in the Prepetition Credit Agreement plus an applicable margin of 2.25% to 3.25%, in each case, based on the Consolidated Total Leverage Ratio, as defined in the Prepetition Credit Agreement.  The maturity date of the Prepetition Credit Facility is February 27, 2018.  The Debtors’ obligations under the Prepetition Credit Facility are secured by substantially all the Debtors’ assets.  As discussed in further detail below, since October of 2015, to prevent a default under the Prepetition Credit Agreement, the Debtors have entered into seven limited duration waiver agreements and two amendments to the Prepetition Credit Agreement.  As of the Petition Date, approximately $174.5 million was outstanding under the Prepetition Credit Facility.


b.                                      Other Indebtedness


As of the Petition Date, in addition to their secured debt obligations under the Prepetition Credit Facility, the Debtors owed approximately $2.3 million in outstanding secured obligations under their various gas gathering agreements.  The Debtors also owed approximately $5.4 million in outstanding unsecured prepetition obligations, which include (a) $444,000 in employee claims, (b) $688,000 in vendor and trade claims, and (c) $4.2 million in tax and other priority claims.



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