Thursday, February 11, 2010

NFR to Raise $250 Million

I saw a snippet that NFR Energy, the production company formed by Nabors Industries and energy private equity company First Reserve, raised $200 million in debt financing earlier this week.  The issue was actually reduced from the planned amount of $250 million.  The seven year senior notes have a 9.75% coupon, which seems kind of pricey when LIBOR is +/- 1%, but it's not a big surprise given the state of the industry.  It's still cheaper than equity funding.

Because the company is not publicly traded, it is not obligated to release current news, but I assume the money was raised to fund drilling operations.  NFR has had some very successful wells on the Texas side of the play, so hopefully that trend will continue.

No comments: