Tellurian Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Debt

Debt

12 Months Ended

Jun. 30, 2013

Note 3 - Debt

Long term debt relates to a $1.7 million note payable re-financed by NP in January 2011 (the "Note Payable"). This Note Payable will be fully amortized in June 2014. The outstanding principal consisted of the following for the fiscal years ended:



	June 30,
	2013			2012
	(In thousands)
Note payable	$	390		$	870
Less current portion of note payable	(390		)	(480		)
Long term debt, excluding current portion	$	—		$	390

As of June 30, 2013, the minimum future principal maturities of long term debt were as follows:



	Total
	(In thousands)
One year	$	390

The variable rate of the note is based upon the Wall Street Journal Prime Rate (the "Index") plus 1.00%, subject to a floor rate of 6.25%. The Index was 3.25% at June 30, 2013, resulting in an interest rate of 6.25% per annum as of June 30, 2013. Under the Note Payable, NP is subject to certain customary financial and restrictive covenants. As of June 30, 2013, NP was in compliance with all financial and restrictive covenants.

In addition, the Company has a $1.0 million working capital line of credit classified as short term debt (the "Line of Credit"). The amount due on the Line of Credit was $51 thousand and $50 thousand as of June 30, 2013, and 2012, respectively. The Line of Credit bears interest at a variable rate, which was 6.25% as of June 30, 2013. The Line of Credit also secures a letter of credit in the amount of $25 thousand in favor of the Bureau of Land Management. As of June 30, 2013, $0.9 million was available under this Line of Credit.

The Note Payable and Line of Credit are collateralized by a first mortgage and an assignment of production from Poplar and are guaranteed by Magellan up to $6.0 million, not to exceed the amount of the principal owed. The carrying amount of the Company's long term debt approximates its fair value due to its variable interest rate, which resets based on the market rates.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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