[Editor’s note: This story was updated at 3:10 p.m. CT Aug. 17.]

Abraxas Petroleum Corp. on Aug. 17 completed recent refinancing transactions with its lenders led by Angelo Gordon as the U.S. oil producer continues to pursue strategic alternatives.

As part of an amendment to its credit facilities, Angelo Gordon agreed to a payment-in-kind interest on Abraxas’ second lien note, which the company said will give it the ability to generate cash to support a cash sweep feature on its first lien note. Abraxas also secured covenant relief and relief from periodic borrowing base redeterminations by the first lienholders.

“Now that we have successfully amended our agreements with Angelo Gordon and our banks, the company’s cash flow is more predictable and should provide time to consider other strategic alternatives,” Abraxas CEO Bob Watson said in a statement.

In a separate release on Aug. 17, Abraxas announced that its board of directors had determined to renew the strategic alternatives review announced last October and led by Petrie Partners LLC.

As of June 30, Abraxas had $102 million outstanding on each of its first and second lien facilities, according to a filing with the U.S. Securities and Exchange Commission. Société Générale is the administrative agent and issuing lender for Abraxas’ senior secured first lien credit facility while Angelo Gordon is the administrative agent for its second lien facility.

On Aug. 17, Abraxas said it issued a warrant to an affiliate of Angelo Gordon granting it the right to purchase up to roughly 33.4 million shares of the company’s common stock for a purchase price of $0.01 per share, at any time during the next five years.

Concurrently, the company entered into an agreement with Angelo Gordon that included the appointment of Todd Dittmann, head of energy at the firm, as a director of Abraxas. Dittmann has spent more than 25 years in energy finance with investing and board experience in both public and private companies, according to the company release.

Abraxas Petroleum is a San Antonio-based E&P company with operations across the Rocky Mountains and Permian Basin focused on core areas in the Bakken/Three Forks shale play in the Williston Basin and the Bone Spring/Wolfcamp in the Delaware Basin.

In response to the effect of the COVID-19 pandemic on the market, Abraxas in March announced a roughly 40% cut to its G&A expense through a combination of salary reductions, reduction in board size and selective layoffs. The company also suspended its guidance and limited its capex for 2020 to minor projects with plans to not drill or complete any new wells until market conditions improve.

According to a March 16 release, most of Abraxas’ lands are currently HBP and at current commodity prices, “the economics of drilling and completions in the Delaware and Bakken are questionable.”

Petrie’s Jon Hughes and Richard Moss will lead the renewed review of strategic alternatives for Abraxas.

“We look forward to working with Petrie to examine ways to optimize value,” Watson commented in a statement. “Our strong, concentrated asset bases in the Delaware and Williston Basins, as well as our excellent hedge book, position Abraxas for success on a standalone basis and also make us an attractive transaction partner.”