5.  Long-Term Debt

Our long-term debt was as follows (in thousands):

At September 30, 2014 and December 31, 2013, the balance outstanding of our senior notes, which bear an annual interest rate of 8.50% and mature on June 15, 2019 (the “8.50% Senior Notes”), was classified as long-term at their carrying value.  Interest on the 8.50% Senior Notes is payable semi-annually in arrears on June 15 and December 15.  The estimated annual effective interest rate on the 8.50% Senior Notes is 8.4%, which includes amortization of debt issuance costs and premiums.  We are subject to various financial and other covenants under the indenture governing the 8.50% Senior Notes and we were in compliance with those covenants as of September 30, 2014.  

The Fifth Amended and Restated Credit Agreement (the “Credit Agreement”) governs our revolving bank credit facility and terminates on November 8, 2018.  Borrowings under our revolving bank credit facility are secured by our oil and natural gas properties.  Availability under such facility is subject to a semi-annual redetermination of our borrowing base that occurs in the spring and fall of each year and is calculated by our lenders based on their evaluation of our proved reserves and their own internal criteria.  

At September 30, 2014 and December 31, 2013, we had $0.6 million and $0.4 million, respectively, of letters of credit outstanding under the revolving bank credit facility.  The estimated annual effective interest rate was 2.9% for the nine months ended September 30, 2014 for borrowings under the revolving bank credit facility.  The estimated annual effective interest rate includes amortization of debt issuance costs and excludes commitment fees and other costs.  As of September 30, 2014, our borrowing base was $750.0 million and our borrowing availability was $402.4 million.  See Note 12 for information on our borrowing base, which was reaffirmed at $750.0 million effective October 22, 2014.     

Under the Credit Agreement, we are subject to various financial covenants calculated as of the last day of each fiscal quarter, including a minimum current ratio and a maximum leverage ratio, each as defined in the Credit Agreement.  We were in compliance with all applicable covenants of the Credit Agreement as of September 30, 2014.

For information about fair value measurements for our 8.50% Senior Notes and revolving bank credit facility, refer to Note 6.