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Alta Mesa Holdings, LP

Oil & Gas Exploration

"Alta Mesa Holdings, LP is a privately held company engaged in onshore oil and gas acquisition, exploitation and production with a seasoned management team, whose mission is to maximize the profitability of our assets in a safe and environmentally sound manner. We apply advanced engineering analyses and enhanced geological techniques to under-developed or over-looked conventional resource areas to create value. We employ disciplined management processes and have the flexibility to respond to the market. Alta Mesa has a large, long-lived and diversified reserve base, with a substantial inventory of low risk development projects. Our portfolio of assets has large components of liquids-rich gas and oil reservoirs. Our core producing assets are located in the Oklahoma Sooner Trend and in South Louisiana". From the Website.(Updated 12-1-2016)

BDC Credit Reporter View

[BACKGROUND TO FOLLOW]. The FS Investment valuations in the Company for IIIQ 2016 have been increased substantially with $300mn of new capital infusions into the Company. The discount on the Subordinated Debt-which was as high as 72% of Cost in the IIQ of 2016- is now being carried at full value or beyond. At November 30, 2016 the Company began to redeem all outstanding 2018 Senior Notes. When completed, any BDC exposure to the Company that was outstanding at 9-0-2016 should be extinguished at par. This is a major positive reversal for the Company and the 4 FS Investments funds involved in its financing. The BDC Credit Reporter keeps the Credit Trend as unchanged, given the value of the debt had already been written up close to par at the end of September 2016. By the IVQ 2016, there should no outstandings whatsoever. We are upgrading the Credit Rating from a 4 to a 3 to reflect the improved financial condition and balance sheet. Assuming no new BDC exposure is added (the Company also issued a new Note offering due in 2024) the rating might be a moot issue, and the Company removed from our Watch List due to no BDC exposure.