Glacier Oil & Gas

About

Glacier Oil & Gas is a privately-held, independent oil & gas company solely focused on the exploration and production of oil and gas resources in the State of Alaska. From the North Slope to the Cook Inlet, we’re working to develop our resources in Alaska for the benefit of the capital-providers and communities we serve, the people we employ, and the State in which we live. We strive to do so in a safe, regulatory compliant, efficient and effective manner. Partnering with local businesses, regional stakeholders and State leaders — Glacier Oil & Gas is investing in Alaska’s future.-From website

Our focus is solely on Alaska — operating both onshore and offshore oil assets in the Cook Inlet at the West McArthur River Unit as well as off the Osprey Platform at the Redoubt Unit. Additionally, Glacier operates the Badami Unit on the North Slope and owns gas assets at the North Fork Unit near Anchor Point on the Kenai Peninsula. Glacier operates all its fields and owns drilling, production and transportation infrastructure associated with these fields. Our substantial processing and transportation capacity in each of our operating areas affords us ample opportunity for production growth. From website

Glacier Oil & Gas Corp., an independent exploration and production company, explores for, develops, and operates oil and gas wells in south-central Alaska. As of April 30, 2014, the company owned approximately 315,913 net acres of leasehold interests, exploration license rights to an additional 108,673 net acres, and interests in 12 crude oil and 11 natural gas wells in Alaska. The company was formerly known as Miller Energy Resources, Inc. Glacier Oil & Gas Corp. is headquartered in Huntsville, Tennessee.-Bloomberg

BDC Credit Reporter View

5/30/2019: Glacier is one of those energy investments which AINV made under different management and a different strategy. Unfortunately, the debt and equity at stake is very large and reducing only modestly ($5mn in the past two quarters to reach $73mn). Also problematic is that AINV is part owner (47%), as well as first and second lien lender and has much to lose. That could result in throwing good money after bad or a miraculous profitable exit down the road. As is often the case, AINV is not telling much about what’s happening to the business but the very substantial unrealized write-down in the equity tranche in the past year speaks volumes. The debt is carried at par but for how long ? There is nearly $3.5mn of investment income at risk, so we’re watching carefully for any news. We know it’s a cliche, but this investment could go either way, which is why the Corporate Credit Rating is a 3.

Highlights

IQ 2019: A top ten AINV investment by size: 1.9% of the portfolio [ AINV 10-K 2019]

The $10mn Term Loan due in 2019 was reduced by $1mn and extended one year. Interest rate unchanged.

Equity value reduced to a discount of 89% from 84%. In last year equity value has dropped from $20mn to $3mn.

3/29/2019: First Lien Term Loan due. AINV: $10mn.

IVQ 2018: AINV has 47% equity ownership

Cost: $73mn FMV: $48mn. One of AINV largest investments

5/18/2017: AINV CC

Ryan Patrick Lynch, Keefe, Bruyette, & Woods, Inc.

Glacier Oil and Gas comment, that used to be the old Miller Energy. While the investment is still market par, that investment — the equity investment in there was written down pretty meaningfully. So I mean, I know that’s an old legacy investment. That investment was restructured a while ago to get the capital structure correct. But we still see some struggles, at least from the — you guys’ equity position shows….

Tanner Powell, Apollo Investment Corporation –

This is the former Miller Energy in March and it is in our investment in an Alaskan E&P company. We did restructure the company and in March of ’16, the company went through a bankruptcy process. Since restructuring the company, we’ve been very focused on cost reduction efforts and consolidation of certain of the company’s facilities. As you also alluded to, rightly, there was a markdown in the particular quarter, which reflected performance of a specific project. We continue to be optimistic relative to various other projects within the company and continue to support the investments accordingly, Ryan. But the specific write-down had to do with a specific performance of a project.