Caza Oil & Gas Inc. and Apollo Investment Corp. entered a forbearance and reservation of rights agreement under which Apollo agreed to refrain from exercising certain rights, until Oct. 31, under the note agreement concerning Caza’s breach of certain financial covenants and other covenants, Caza said Oct. 1.

Caza entered a note purchase agreement with Apollo on May 23, 2013. Apollo agreed to purchase up to $50 million of Caza’s senior secured notes. On June 30, the facility’s outstanding balance was $45 million, the same outstanding balance as Sept. 30.

Throughout the period of the note agreement, Caza has been required to comply with certain financial covenants, which are tested quarterly, and to maintain a limit on expenditures for general and administrative costs.

Most recently in the second quarter 2015 results, Caza was not fully in compliance with its financial covenants. The company and Apollo executed a third amendment to the note purchase agreement under which Apollo waived the relevant financial covenants until Sept. 30, 2015, Caza said.

Caza still aims to conclude a financing, or a complete refinancing, that might enable the Apollo facility to be retired along with sums owed pursuant to the convertible loan agreement Caza entered into with YA Global Master SPV Ltd. (Yorkville), an investment fund managed by Yorkville Advisors Global LP, and also provide sufficient additional capital to continue developing its Bone Spring assets.

Caza and its advisers have considered financing options and assets sales. A potential transaction, if closed, could be an equity investment, the company said.

Caza Oil & Gas Inc. is based in The Woodlands, Texas.