Form 8-K BASIC ENERGY SERVICES For: Aug 15
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 15, 2016
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-32693 | 54-2091194 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |
801 Cherry Street, Suite 2100 | |||
Fort Worth, Texas | 76102 | ||
(Address of principal executive offices) | (Zip Code) | ||
Registrant’s telephone number, including area code: (817) 334-4100
Not Applicable
(Former name or former address, if changed since last report.)
________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
On August 15, 2016, Basic Energy Services, Inc. (“Basic”) elected to utilize a 30-day grace period with respect to, and not to make, the approximate $18.4 million semi-annual interest payment that was due on August 15, 2016 with respect to Basic’s outstanding 7.75% senior notes due 2019 (the “2019 Notes”). Under the indenture governing the 2019 Notes (the “2019 Notes Indenture”) the Company has a 30-day grace period after the interest payment date before an event of default would occur September 14, 2016. The occurrence of an event of default under the 2019 Notes Indenture would give the trustee or the holders of at least 25% of principal amount of the outstanding 2019 Notes the option to declare all of the 2019 Notes due and payable immediately upon such event of default. Additionally, failure to make the interest payments on the 2019 Notes when due at the end of such grace period would constitute an event of default under the Company’s (i) Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent, and certain lenders thereto (the “Credit Agreement”); (ii) Term Loan Credit Agreement with U.S. Bank National Association, as administrative agent, and certain lenders thereto (the “Term Loan Agreement”); and (iii) indenture (the “2022 Notes Indenture”) governing Basic’s outstanding 7.75% senior notes due 2022 (the “2022 Notes”). The occurrence of an event of default under the Credit Agreement or the Term Loan Agreement would allow the respective administrative agents to declare Basic’s obligations under the Credit Agreement and Term Loan Agreement immediately due and payable and to exercise such administrative agents’ and lenders’ rights under the Credit Agreement and Term Loan Agreement. The occurrence of an event of default under the 2022 Notes Indenture would give the trustee or the holders of at least 25% of principal amount of the outstanding 2022 Notes the option to declare all of the 2022 Notes due and payable immediately upon such event of default.
Item 7.01 Regulation FD Disclosure.
On August 15, 2016, Basic issued a press release announcing its election to utilize a 30-day grace period with respect to the interest payment due on August 15, 2016 under the indenture governing Basic’s 7.75% senior notes due 2019. A copy of the press release is being furnished as Exhibit 99.1 hereto and is incorporated into this Item 7.01 by reference.
The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing of Basic’s under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. | |
99.1 | Press Release dated August 15, 2016. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Basic Energy Services, Inc. | ||
Date: August 15, 2016 | By: | /s/ Alan Krenek |
Alan Krenek | ||
Senior Vice President, Chief Financial Officer, | ||
Treasurer and Secretary | ||
EXHIBIT INDEX
Exhibit No. | Description |
99.1 | Press Release dated August 15, 2016. |
Exhibit 99.1
BASIC ENERGY SERVICES ANNOUNCES DECISION
TO UTILIZE INTEREST PAYMENT GRACE PERIOD TO CONTINUE DELEVERAGING DISCUSSIONS WITH TERM LOAN LENDERS AND UNSECURED BONDHOLDERS
FORT WORTH, Texas - August 15, 2016 - Basic Energy Services, Inc. (NYSE: BAS) (“Basic” or the “Company”) today announced that it has elected to utilize the 30-day grace period with respect to an $18.4 million interest payment due today on its 7.75% senior notes due 2019 (the “2019 Notes”). Under the terms of the terms of the indenture governing the 2019 Notes (the “2019 Notes Indenture”), the Company has a 30-day grace period after the interest payment date before an event of default would occur on September 14, 2016. Basic believes it is in the best interests of all stakeholders to use the grace period to continue to engage in discussions with its secured and unsecured debtholders regarding strategic alternatives to improve Basic’s long-term capital structure. There are no discussions underway that would impair trade vendors, customers, or employees in any regard, and the Company believes that it has ample liquidity at this time to continue efficient and uninterrupted operations in the ordinary course.
Roe Patterson, Basic’s President and Chief Executive Officer, stated, “We have made the strategic choice to use the grace period while our discussions with Basic’s debtholders continue. During these discussions, we anticipate meeting all of our obligations to suppliers, customers, employees, and others, as usual, and we will continue to provide our customers with dependable, high-quality services, which is the hallmark of our Company.”
About Basic Energy Services
Basic Energy Services provides well site services essential to maintaining production from the oil and gas wells within its operating area. The Company employs more than 3,400 employees in more than 100 service points throughout the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, and the Rocky Mountain and Appalachian regions. Additional information on Basic Energy Services is available on the Company’s website at www.basicenergyservices.com.
Safe Harbor Statement
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Basic has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including (i) changes in demand for our services and any related material impact on our pricing and utilizations rates, (ii) Basic's ability to execute, manage and integrate acquisitions successfully, (iii) changes in our expenses, including labor or fuel costs and financing costs, (iv) continued volatility of oil or natural gas prices, and any related changes in expenditures by our customers, (v) competition within our industry, and (vi) Basic’s ability to comply with its financial and other covenants and metrics in its debt agreements, as well as any cross-default provisions. Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of Basic’s Form 10-K for the year ended December 31, 2015 and subsequent Form 10-Qs filed with the SEC. While Basic
makes these statements and projections in good faith, neither Basic nor its management can guarantee that anticipated future results will be achieved. Basic assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Basic, whether as a result of new information, future events, or otherwise.
# # #
Contacts: Alan Krenek, Chief Financial Officer
Basic Energy Services, Inc.
817-334-4100
Jack Lascar
Dennard-Lascar Associates
713-529-6600
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