Lafayette-based Stone Energy Corp. maxed out its credit facility before the company’s banks reduced the amount of money the oil and gas producer could borrow.
The independent oil company borrowed the $385 million available on Thursday and will use the money for general corporate purposes. The company said its banks notified Stone of a plan to redetermine its borrowing base, the amount the banks will lend based on the value of Stone’s collateral. Stone expects that the new borrowing base will be lower.
“We felt it important to increase our liquidity in the current low-price commodity environment to ensure we have adequate financial flexibility,” said Stone Chairman, President and Chief Executive Officer David Welch.
Stone has hired Lazard as its financial adviser and Latham & Watkins LLP as its legal adviser. The firms will help Stone analyze financial, transactional and strategic alternatives.