Form 8-K PETROQUEST ENERGY INC For: Sep 14
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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):
September 13, 2016
PETROQUEST ENERGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE (State of Incorporation) 400 E. Kaliste Saloom Rd., Suite 6000 Lafayette, Louisiana (Address of principal executive offices) | 72-1440714 (I.R.S. Employer Identification No.) 70508 (Zip code) |
Commission File Number: 001-32681
Registrant’s telephone number, including area code: (337) 232-7028
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 1.01 Entry into a Material Definitive Agreement
First Supplemental Indenture
On September 13, 2016, PetroQuest Energy, Inc. (the “Company”), the subsidiary guarantors party thereto, and Wilmington Trust, National Association (the “2021 Notes Trustee”), entered into the First Supplemental Indenture (the “Supplemental Indenture”), implementing certain amendments to the Indenture (the “Indenture”) governing the Company’s outstanding 10% Second Lien Senior Secured Notes due 2021 (the “2021 Notes”) following the Company’s receipt of requisite consents of the holders of the 2021 Notes pursuant to the consent solicitation in respect of the 2021 Notes that commenced on August 25, 2016 (the “Consent Solicitation”). The Supplemental Indenture amends the Indenture to, among other things, (i) permit the Company to increase the principal amount of its 10% Second Lien Senior Secured PIK Notes due 2021 (the “New Notes”) to be issued in the Exchange Offers (as defined below) or issue additional New Notes in connection with the payment in kind interest (“PIK Interest”) feature of the New Notes; (ii) permit the Company to use the proceeds of a senior secured credit facility to purchase or redeem the 10% Senior Notes due 2017 (the “2017 Notes”) that remain outstanding after the Exchange Offers; (iii) broaden the categories of potential lenders eligible to provide credit facilities to the Company; (iv) make certain modifications with respect to the percentage of secured priority debtholders required to approve certain determinations under the collateral trust agreement; and (v) permit the Company and the 2021 Notes Trustee to amend the Indenture without the consent of the holders of the 2021 Notes in order to provide for the issuance of the New Notes and the payment of PIK Interest. The Supplemental Indenture is effective upon execution but will only become operative upon consummation of the Exchange Offers and Consent Solicitation.
The foregoing description of the Supplemental Indenture is not complete and is qualified by reference to the Supplemental Indenture, which is filed herewith as Exhibit 4.1 and is incorporated by reference in this current report.
Waiver of Registration Rights
Pursuant to the Consent Solicitation, on September 13, 2016, holders of the 2021 Notes waived any and all registration rights with respect to the 2021 Notes under the registration rights agreement with respect to the 2021 Notes, pursuant to a waiver of registration rights (the “Waiver”) among the Company, the subsidiary guarantors party thereto and Seaport Global Securities LLC, as representative of the holders of the 2021 Notes.
The foregoing description of the Waiver is not complete and is qualified by reference to the Waiver, which is filed herewith as Exhibit 4.2 and is incorporated by reference in this current report.
Item 8.01 Other Events
On September 14, 2016, the Company issued a press release announcing the results as of the extended early tender date for its private offers (the Exchange Offers”) to eligible holders to exchange its outstanding 2017 Notes, issued under an indenture, and its outstanding 2021 Notes, for up to (i) $280.295 million aggregate principal amount of its New Notes, and (ii) 3,517,000 shares of its common stock, and the related Consent Solicitation, all on the terms and subject to the conditions set forth in a Confidential Information Memorandum and Consent Solicitation Statement and related letter of transmittal and consent, each dated as of August 25, 2016. A copy of the press release is filed herewith as Exhibit 99.1 and incorporated by reference in this current report.
This filing shall not constitute an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description of Exhibit
4.1 | First Supplemental Indenture, dated as of September 13, 2016, among PetroQuest Energy, Inc., the Subsidiary Guarantors identified therein, and Wilmington Trust, National Association. |
4.2 | Waiver of Registration Rights, dated as of September 13, 2016, among PetroQuest Energy, Inc., the Subsidiary Guarantors and Seaport Global Securities LLC. |
99.1 | Press Release dated September 14, 2016. |
SIGNATURE
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.
Date: September 14, 2016
PETROQUEST ENERGY, INC.
/s/ J. Bond Clement
J. Bond Clement
Executive Vice President,
Chief Financial Officer and Treasurer
Execution version
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PETROQUEST ENERGY, INC.
10.00% SECOND LIEN SECURED SENIOR NOTES DUE 2021
SUBSIDIARY GUARANTORS
_________________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of September 13, 2016
TO THE INDENTURE
Dated as of February 17, 2016
_________________________
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee and Collateral Trustee
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FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as
of September 13, 2016, to the Indenture, dated as of February 17, 2016 (the “Base Indenture”
and, as previously modified or amended prior to this Supplemental Indenture, the “Indenture”),
among PETROQUEST ENERGY, INC., a corporation duly organized and existing under the
laws of the State of Delaware (the “Company”), having its principal office at 400 E. Kaliste
Saloom Road, Suite 6000, Lafayette, Louisiana 70508, the Subsidiary Guarantors party thereto
(the “Subsidiary Guarantors”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as
Trustee (the “Trustee”) and Collateral Trustee (in such capacity, together with its successors and
assigns, the “Collateral Trustee”).
WHEREAS, the Company, the Subsidiary Guarantors, the Trustee and the Collateral
Trustee executed and delivered the Base Indenture providing for the issuance of $144,674,000
aggregate principal amount of the Company’s 10% Second Lien Secured Senior Notes Due 2021
(the “Notes”);
WHEREAS, Section 9.02 of the Indenture provides that the Company, the Subsidiary
Guarantors, the Trustee and the Collateral Trustee may amend the Indenture or the Notes with
the written consent of Holders representing at least a majority in principal amount of the Notes
then outstanding (including consents obtained in connection with a tender offer or exchange for
the Notes), subject to certain exceptions;
WHEREAS, the Company desires to enter into, and has requested the Trustee and the
Collateral Trustee to join with it and the Subsidiary Guarantors in entering into, this
Supplemental Indenture for the purpose of amending the Indenture and the Notes in certain
respects as permitted by Section 9.02 of the Indenture;
WHEREAS, the Company has made an offer (the “Exchange Offer”) to the registered
holders of Existing Unsecured Notes and Holders of Notes to exchange, upon the terms and
subject to the conditions set forth in the Offering Memorandum and Consent Solicitation
Statement, dated August 25, 2016 (as amended, modified or supplemented, the “Offer to
Exchange”), any and all of such holders’ outstanding Existing Unsecured Notes and outstanding
Notes for the Company’s 10% Second Lien Secured Senior PIK Notes due 2021 and shares of
common stock of the Company, each in amounts as specified in the Offer to Exchange;
WHEREAS, in conjunction with the Exchange Offer, the Company has also solicited
consents from the Holders of Notes for certain proposed amendments (the “Proposed
Amendments”) to the Indenture and the Notes, which Proposed Amendments are contained in
this Supplemental Indenture; and
WHEREAS, (i) the Company has received the consent of the Holders of more than a
majority in principal amount of the outstanding Notes to the Proposed Amendments, all as
certified by an Officers’ Certificate delivered to the Trustee and the Collateral Trustee
simultaneously with the execution and delivery of this Supplemental Indenture, (ii) the Company
has delivered to the Trustee simultaneously with the execution and delivery of this Supplemental
Indenture an Opinion of Counsel relating to this Supplemental Indenture as contemplated by
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Section 9.06 of the Indenture, and (iii) the Company and the Subsidiary Guarantors have
satisfied all other conditions required under Article 9 of the Indenture to enable the Company,
the Subsidiary Guarantors, the Trustee and the Collateral Trustee to enter into this Supplemental
Indenture.
NOW, THEREFORE, in consideration of the above premises, each party hereby agrees,
for the benefit of the others and for the equal and ratable benefit of the Holders of Notes, as
follows:
ARTICLE I
AMENDMENTS TO THE INDENTURE AND THE NOTES
Section 1.1 Amendments to Section 1.01 of the Indenture. Section 1.01 of the
Indenture is hereby amended by:
(a) amending and restating the definition of “Borrowing Base” in its entirety
as follows:
“Borrowing Base” means the maximum amount in U.S. dollars
determined or re-determined by the lenders under the Priority Lien Credit
Agreement as the aggregate lending value to be ascribed to the Oil and Gas
Properties of the Company and the Subsidiary Guarantors against which
commercial banks or one or more entities that are beneficial owners of New Notes
or the Securities or affiliates of such entities are prepared to provide loans or other
Indebtedness to the Company and the Subsidiary Guarantors under the Priority
Lien Credit Agreement, using their customary practices and standards for
determining reserve-based loans and which are generally applied by commercial
banks or one or more entities that are beneficial owners of New Notes or the
Securities or affiliates of such entities to borrowers in the Oil and Gas Business,
as determined either quarterly or semi-annually during each year and/or on such
other occasions as may be provided for by the Priority Lien Credit Agreement,
and which is based upon, inter alia, the review by such lenders of the
Hydrocarbon reserves, royalty interests and assets and liabilities of the Company
and the Subsidiary Guarantors.
(b) amending and restating the definition of “Credit Facility” in its entirety as
follows:
“Credit Facility” means one or more debt facilities (including, without
limitation, the Priority Lien Credit Agreement), commercial paper facilities or
other debt instruments, indentures or agreements in each case provided by one or
more commercial banks or one or more entities that are beneficial owners of New
Notes or the Securities or affiliates of such entities providing for revolving credit
loans, term loans, receivables financings (including through the sale of
receivables to the lenders or to special purpose entities formed to borrow from the
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lenders against such receivables), letters of credit, capital markets financings
and/or private placements involving bonds or other debt securities, or other debt
obligations, in each case, as amended, restated, modified, renewed, refunded,
restructured, supplemented, replaced or refinanced from time to time in whole or
in part from time to time, including without limitation any amendment increasing
the amount of Debt Incurred or available to be borrowed thereunder, extending
the maturity of any Debt Incurred thereunder or contemplated thereby or deleting,
adding or substituting one or more parties thereto (whether or not such added or
substituted parties are banks or other institutional lenders).
(c) amending and restating item (19) in the definition of “Permitted Liens” in
its entirety as follows:
(19) Liens securing Refinancing Indebtedness of the Company or any
Subsidiary Guarantor, provided to the extent such Indebtedness was Incurred to
Refinance the Securities such Indebtedness constitutes Parity Lien Debt, Junior
Lien Debt or unsecured Debt; and
(d) amending and restating the definition of “Required Parity Lien
Debtholders” in its entirety as follows:
“Required Parity Lien Debtholders” means, at any time, the holders of a
majority in aggregate principal amount of all Parity Lien Debt then outstanding,
calculated in accordance with the provisions of the Collateral Trust Agreement.
For purposes of this definition, Parity Lien Debt registered in the name of, or
beneficially owned by, the Company or any Affiliate of the Company will be
deemed not to be outstanding.
(e) adding the following new definitions immediately after the definition of
“Net Working Capital”:
“New Notes” means the Company’s 10% Second Lien Secured Senior PIK
Notes due 2021 issued upon closing of the New Notes Exchange Offer.
“New Notes Exchange Offer” means the Company’s August 2016
Exchange Offers and Consent Solicitation offerings to exchange New Notes and
shares of the Company’s common stock for the Securities and Existing Unsecured
Notes, as the same may be amended.
“New Notes Indenture” means that certain indenture under which the New
Notes are initially issued upon closing of the New Notes Exchange Offer.
(f) adding the following new definition immediately after the definition of
“PetroQuest L.L.C.”:
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“PIK Payments” means increases in the principal amount of the New
Notes and the issuance of additional certificated New Notes to existing holders of
certificated New Notes, in each case to the extent required or permitted under the
New Notes Indenture, at the Company’s election on one or more of the first three
interest payment dates for the New Notes following the initial issuance of the
New Notes upon closing of the New Notes Exchange Offer.
Section 1.2 Amendment to Section 4.03(b)(1) of the Indenture. Section 4.03(b)(1) of
the Indenture is hereby amended and restated in its entirety as follows:
(1) Indebtedness Incurred by the Company and Subsidiary Guarantors
pursuant to any Credit Facility; provided, however, that, immediately after giving
effect to any such Incurrence, the aggregate amount of all Indebtedness Incurred
under this clause (1) and then outstanding does not exceed the greater of
(A) $50.0 million, (B) the Borrowing Base in effect at the time of the Incurrence
and (C) 30% of Modified ACNTA determined at the time of Incurrence; provided
further, however, that for the avoidance of doubt, the proceeds of any such Credit
Facility may be used to purchase or redeem the Existing Unsecured Notes;
Section 1.3 Amendment to Section 4.03(b)(3) of the Indenture. Section 4.03(b)(3) of
the Indenture is hereby amended and restated in its entirety as follows:
(3) (a) the Securities, (b) the New Notes issued on the initial issuance
date of the New Notes, (c) any PIK Payments and Guarantees thereof,
(d) Additional Securities and other Parity Lien Debt (other than PIK Payments on
the New Notes) not to exceed (for purposes of this clause (3)(d) only) the greater
of (i) $350.0 million less (A) $53,626,575, such amount being the aggregate
amount of cash that was paid to holders of the Existing Unsecured Notes in
connection with the Company’s February 2016 exchange of Existing Unsecured
Notes for Securities (excluding cash that was paid to the exchanging holders of
Existing Unsecured Notes as premium or accrued and unpaid interest on such
exchanged Existing Unsecured Notes), (B) the aggregate principal amount of the
New Notes issued on the initial issuance date of the New Notes and (C) the
aggregate principal amount of the Securities remaining outstanding following the
closing of the New Notes Exchange Offer and (ii) 30% of Modified ACNTA
determined at the time of the Incurrence, unless such issuance of Additional
Securities or other Parity Lien Debt is associated with an Approved Acquisition
and (e) Guarantees of Indebtedness permitted to be Incurred under this clause (3);
provided, however, any Parity Lien Debt issued after the Issue Date pursuant to
this clause (3) shall not have a Stated Maturity any earlier than the Stated
Maturity of the Securities;
Section 1.4 Amendment to Section 9.01 of the Indenture. Section 9.01 of the
Indenture is hereby amended by deleting the word “or” at the end of item (12) thereof, replacing
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the period at the end of item (13) thereof and replacing it with “; or”, and by adding a new
item (14) as follows:
(14) to provide for the issuance of the New Notes and the making of
PIK Payments.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.1 Defined Terms. For all purposes of this Supplemental Indenture, except
as otherwise defined or unless the context otherwise requires, terms used in capitalized form in
this Supplemental Indenture and defined in the Indenture have the meanings specified in the
Indenture.
Section 2.2 Indenture. Except as amended hereby, the Indenture and the Notes are in
all respects ratified and confirmed and all the terms shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound
hereby and all terms and conditions of both shall be read together as though they constitute a
single instrument.
Section 2.3 Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
Section 2.4 Successors. All agreements of the Company and the Subsidiary
Guarantors in this Supplemental Indenture and the Notes shall bind their respective successors.
All agreements of the Trustee in this Supplemental Indenture shall bind its successors.
Section 2.5 Multiple Originals. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to prove this Supplemental Indenture.
The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or
PDF transmission shall constitute effective execution and delivery of this Supplemental
Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture
for all purposes.
Section 2.6 Severability. In case any provision in this Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 2.7 Trustee Disclaimer. The Trustee and the Collateral Trustee accept the
amendments of the Indenture effected by this Supplemental Indenture and agree to execute the
trust created by the Indenture as hereby amended, but on the terms and conditions set forth in the
Indenture, including the terms and provisions defining and limiting the liabilities and
responsibilities of the Trustee and the Collateral Trustee, which terms and provisions shall in like
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manner define and limit the Trustee’s and the Collateral Trustee’s liabilities and responsibilities
in the performance of the trust created by the Indenture as hereby amended, and without limiting
the generality of the foregoing, the Trustee and the Collateral Trustee shall not be responsible in
any manner whatsoever for or with respect to any of the recitals or statements contained herein,
all of which recitals or statements are made solely by the Company and the Subsidiary
Guarantors, and the Trustee and the Collateral Trustee make no representation with respect to
any such matters. Additionally, the Trustee and the Collateral Trustee make no representations as
to the validity or sufficiency of this Supplemental Indenture.
Section 2.8 Effectiveness. The Proposed Amendments effected by this Supplemental
Indenture shall take effect on the date hereof, provided that each of the parties hereto shall have
executed and delivered this Supplemental Indenture; provided, however, that the Proposed
Amendments shall be operative only upon, and simultaneously with, and shall have no force and
effect prior to, the Company’s notification to the Trustee, the Collateral Trustee and the
Exchange Agent (as defined in the Offer to Exchange) of its acceptance for exchange of at least a
majority in aggregate principal amount of the Notes then outstanding in accordance with the
terms of the Exchange Offer.
Section 2.9 Supplemental Indenture Controls. In the event there is any conflict or
inconsistency between the Indenture and this Supplemental Indenture, the provisions of this
Supplemental Indenture shall control.
Section 2.10 Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
[Signature Page to First Supplemental Indenture]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed as of the day and year written above.
PETROQUEST ENERGY, INC.
By: /s/ J. Bond Clement
Name: J. Bond Clement
Title: Executive Vice President, Chief Financial
Officer and Treasurer
SUBSIDIARY GUARANTORS:
PETROQUEST ENERGY, L.L.C.
By: /s/ J. Bond Clement
Name: J. Bond Clement
Title: Executive Vice President, Chief Financial
Officer and Treasurer
TDC ENERGY LLC
By: /s/ J. Bond Clement
Name: J. Bond Clement
Title: Executive Vice President, Chief Financial
Officer and Treasurer
[Signature Page to First Supplemental Indenture]
TRUSTEE AND COLLATERAL TRUSTEE:
WILMINGTON TRUST, NATIONAL
ASSOCIATION
By: /s/ Shawn Goffinet
Name: Shawn Goffinet
Title: Assistant Vice President
1
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WAIVER OF REGISTRATION RIGHTS
THIS WAIVER OF REGISTRATION RIGHTS (this “Waiver”) is executed as of
September 13, 2016, by and among PetroQuest Energy, Inc., a Delaware corporation (the
“Company”), the guarantors listed on the signature pages hereto (the “Guarantors”) and Seaport
Global Securities LLC (as representative, the “Representative”) of the Holders. Capitalized
terms used but not defined herein shall have the meanings given such terms in the Registration
Rights Agreement (defined herein).
WHEREAS, the Company, the Guarantors and the Representative are party to that certain
Registration Rights Agreement dated as of February 17, 2016 (the “Registration Rights
Agreement”);
WHEREAS, Section 6(b) of the Registration Rights Agreement provides that the
provisions of the Registration Rights Agreement may not be waived unless the Company and the
Guarantors have obtained the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such waiver, and that any
such wavier pursuant to Section 6(b) of the Registration Rights Agreement shall be by a writing
executed by each of the parties to the Registration Rights Agreement;
WHEREAS, the Company and the Guarantors desire to enter into, and have requested the
Representative to join with them in entering into, this Waiver for the purpose of waiving any and
all registration rights with respect to the Registrable Securities under the Registration Rights
Agreement;
WHEREAS, the Company has made an offer (the “Exchange Offer”) to the Eligible
Holders (as defined in the Offering Memorandum, defined herein) of outstanding 10% Senior
Notes due 2017 (the “2017 Notes”) and to Eligible Holders of outstanding 10% Second Lien
Senior Secured Notes due 2021 (the “2021 Notes” and together with the 2017 Notes, the “Old
Notes”) to exchange, upon the terms and subject to the conditions set forth in the Offering
Memorandum and Consent Solicitation Statement, dated August 25, 2016 (as amended, modified
or supplemented, the “Offer to Exchange”), up to (i) $280.295 million aggregate principal
amount of new 10% Second Lien Senior Secured PIK Notes due 2021 (the “New Notes”), and
(ii) 3,517,000 shares of the Company’s common stock, par value $.001 per share (the “Shares”),
each in amounts as specified in the Offer to Exchange;
WHEREAS, in conjunction with the Exchange Offer, the Company has also solicited
consents from the Holders of Registrable Securities to obtain a waiver of any and all registration
rights with respect to the Registrable Securities under the Registration Rights Agreement, which
waiver is contained in this Waiver; and
WHEREAS, the Company has received the consent of the Holders of more than a
majority in principal amount of the outstanding Registrable Securities to the waiver contained in
this Waiver.
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NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned hereby agree as follows:
1. Waiver of Any and All Registration Rights under the Registration Rights
Agreement. The Representative, on behalf of the Holders of Registrable Securities and pursuant
to Section 6(b) of the Registration Rights Agreement, hereby waives any and all registration
rights of the Holders of Registrable Securities under the Registration Rights Agreement,
including but not limited to any and all rights under Sections 2, 3 and 4 thereof. For avoidance
of doubt, this waiver relates to any and all future right to request the Company to offer to the
Holders to exchange all of the Registrable Securities for Exchange Securities, to require the
Company to file a Shelf Registration Statement providing for the sale of the Registrable
Securities, or to any increase in the interest rate on the Registrable Securities as a result of any
Registration Default.
2. Effectiveness. The waiver effected by this Waiver shall take effect on the date hereof,
provided that each of the parties hereto shall have executed and delivered this Waiver; provided,
however, that this Waiver shall be operative only upon, and simultaneously with, and shall have
no force and effect prior to, the Company’s notification to the Representative of its acceptance
for exchange of at least a majority in aggregate principal amount of the Registrable Securities
then outstanding in accordance with the terms of the Exchange Offer.
3. Counterparts. This Waiver may be executed in any number of counterparts by means of
an original, facsimile or portable document format (PDF) signature, each of which shall be
deemed an original instrument and all which together shall constitute one and the same
instrument.
4. Governing Law. This Waiver shall be governed by the laws of the State of New York.
[Signature Pages Follow]
[SIGNATURE PAGE TO WAIVER OF REGISTRATION RIGHTS – 2021 NOTES REGISTRATION RIGHTS AGREEMENT]
In Witness Whereof, the undersigned execute this Waiver as of the date first written
above.
REPRESENTATIVE:
SEAPORT GLOBAL SECURITIES LLC
By: ___/s/ Gary Meringer__________________________
Name: Gary Meringer
Title: General Counsel
[SIGNATURE PAGE TO WAIVER OF REGISTRATION RIGHTS – 2021 NOTES REGISTRATION RIGHTS AGREEMENT]
COMPANY:
PETROQUEST ENERGY, INC.
By: ___/s/ J. Bond Clement_________________________
Name: J. Bond Clement
Title: Executive Vice President and Chief Financial
Officer
GUARANTORS:
PETROQUEST ENERGY, L.L.C.
By: ___/s/ J. Bond Clement_________________________
Name: J. Bond Clement
Title: Executive Vice President and Chief Financial
Officer
TDC ENERGY LLC
By: ___/s/ J. Bond Clement_________________________
Name: J. Bond Clement
Title: Executive Vice President and Chief Financial
Officer
NEWS RELEASE
PETROQUEST ENERGY ANNOUNCES RESULTS OF THE EXCHANGE OFFERS AND CONSENT SOLICITATION AS OF THE EXTENDED EARLY TENDER DATE
LAFAYETTE, LA - September 14, 2016 - PetroQuest Energy, Inc. (NYSE: PQ) announced today the early participation results of its previously announced private exchange offers (the “Exchange Offers”) and consent solicitation (the “Consent Solicitation”) to Eligible Holders (as defined below) of its outstanding 10% Senior Notes due 2017 (CUSIP No. 716748 AA6) (the “2017 Notes”) and its outstanding 10% Second Lien Senior Secured Notes due 2021 (CUSIP 716748 AE8 / U7167U AB0) (the “2021 Notes” and together with the 2017 Notes, the “Old Notes”) for up to (i) $280.295 million aggregate principal amount of its newly issued 10% Second Lien Senior Secured PIK Notes due 2021 (the “New Notes”), and (ii) 3,517,000 shares of its common stock (the “Shares”). In the Consent Solicitation, the Company is soliciting consents from the holders of the 2021 Notes to adopt certain amendments to the indenture governing the 2021 Notes (the “2021 Notes Indenture”) and the registration rights agreement with respect to the 2021 Notes (the “2021 Registration Rights Agreement”).
As of 5:00 p.m., New York City time, on September 13, 2016 (the “Extended Early Tender Date”), approximately $243.5 million in aggregate principal amount of the Old Notes, representing 86.86% of the outstanding aggregate principal amount of Old Notes, had been validly tendered (and not validly withdrawn), and holders of approximately $130.5 million in aggregate principal amount of the 2021 Notes, representing 90.2% of the outstanding aggregate principal amount of the 2021 Notes, had consented to the amendments to the 2021 Notes Indenture and 2021 Registration Rights Agreement. PetroQuest intends to execute a supplemental indenture to the 2021 Notes Indenture governing the Old Notes to implement the amendments to the 2021 Notes Indenture and a waiver with respect to the registration rights in the 2021 Registration Rights Agreement.
Withdrawal rights previously expired on September 8, 2016 at 5:00 p.m., New York City time. Accordingly, Eligible Holders who have previously tendered their Old Notes can no longer validly withdraw those notes from the Exchange Offers and Consent Solicitation, except to the extent required by law.
For each $1,000 principal amount of Old Notes validly tendered and not validly withdrawn prior to the Extended Early Tender Date, Eligible Holders will be eligible to receive the “Total Exchange Consideration” set forth in the table below, which includes the “Early Tender Premium.” For each $1,000 in principal amount of the Old Notes validly tendered after the Extended Early Tender Date, Eligible Holders will be eligible to receive only the “Exchange Consideration” set forth in the table below.
The following table sets forth the exchange consideration for the Old Notes:
Title/CUSIP Number of Old Notes | Maturity Date | Aggregate Principal Amount Outstanding | Exchange Consideration(1) | Early Tender Premium(1) | Total Exchange Consideration(1)(2) |
10% Senior Notes due 2017 / 716748 AA6 | September 1, 2017 | $135.6 million | $1,000 principal amount of New Notes | Portion of 3,517,000 shares of common stock on a pro rata basis with all Eligible Holders who validly tender 2017 Notes and 2021 Notes prior to the Early Tender Date, rounded down to the nearest whole share(3) | $1,000 principal amount of New Notes and portion of 3,517,000 shares of common stock on a pro rata basis with all Eligible Holders who validly tender 2017 Notes and 2021 Notes prior to the Early Tender Date(3) |
10% Second Lien Senior Secured Notes due 2021 / 716748 AE8 / U7167U AB0 | February 15, 2021 | $144.7 million | $1,000 principal amount of New Notes | Portion of 3,517,000 shares of common stock on a pro rata basis with all Eligible Holders who validly tender 2017 Notes and 2021 Notes prior to the Early Tender Date, rounded down to the nearest whole share(3) | $1,000 principal amount of New Notes and portion of 3,517,000 shares of common stock on a pro rata basis with all Eligible Holders who validly tender 2017 Notes and 2021 Notes prior to the Early Tender Date(3) |
___________________
(1) For each $1,000 principal amount of Old Notes accepted for exchange.
(2) Includes Early Tender Premium.
(3) Based on the valid tender of 86% of the total combined outstanding aggregate principal amount of the Old Notes prior to the Extended Early Tender Date, each Eligible Holder will receive approximately 14.5901 shares of common stock for each $1,000 principal amount of Old Notes accepted for exchange, with the total aggregate amount of shares of common stock received by each such Eligible Holder rounded down to the nearest whole share.
The Exchange Offers and Consent Solicitation are being made upon the terms and subject to the conditions set forth in the Confidential Offering Memorandum and Consent Solicitation Statement (as it may be amended, modified or supplemented from time to time, the “Offering Memorandum”) and related letter of transmittal and consent (the “Letter of Transmittal”), each dated August 25, 2016.
The Exchange Offers and Consent Solicitation will expire at 11:59 p.m., New York City time, on September 22, 2016, unless extended (the “Expiration Date”). The closing of the Exchange Offers and Consent Solicitation is subject to, and conditioned upon, the satisfaction or waiver of conditions set out in the Offering Memorandum and Letter of Transmittal.
Any 2021 Notes not tendered and exchanged for New Notes and Shares pursuant to the Exchange Offer with respect to the 2021 Notes prior to the Expiration Date will remain outstanding and the holders will be subject to the terms of the supplemental indenture implementing the amendments to the 2021 Notes Indenture and the waiver of registration rights contained in the 2021 Registration Rights Agreement.
The New Notes and the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or with any securities regulatory authority of any State or other jurisdiction. The New Notes and the Shares may not be offered or sold in the United States or to or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers will be made, and the New Notes and the Shares are being offered and will be issued, only to holders of Old Notes (1) in the United States, who are “qualified institutional buyers” as defined in Rule 144A under the Securities Act (“QIBs”), in a private transaction in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof and (2) outside the United States, who are persons other than U.S. persons as defined in Rule 902 under the Securities Act in offshore transactions in compliance with Regulation S under the Securities Act. The complete terms and conditions of the Exchange Offers and Consent Solicitation, as well as the
terms of the New Notes and the Shares, are described in the Offering Memorandum and Letter of Transmittal, copies of which may be obtained by “Eligible Holders” by contacting D.F. King & Co., Inc., the information agent for the Exchange Offers and Consent Solicitation, at 48 Wall Street, 22nd Floor, New York, New York 10005, (212) 269-5550 (collect) or (800) 848-3409 (toll free) or via the following website: http://www.dfking.com/petroquest.
This news release does not constitute an offer to purchase the New Notes or the Shares or a solicitation of consents to amend the 2021 Notes Indenture or the 2021 Registration Rights Agreement. The Exchange Offers and Consent Solicitation are made solely pursuant to the Offering Memorandum and Letter of Transmittal. The Exchange Offers and Consent Solicitation are not being made to holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in Texas, Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest's common stock trades on the New York Stock Exchange under the ticker PQ.
For further information, contact: | Matt Quantz, Manager - Corporate Communications |
(337) 232-7028, www.petroquest.com | |
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this news release are forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements are based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. Actual results may vary significantly from those anticipated due to many factors, including our ability to successfully consummate the Exchange Offers and Consent Solicitation; the timing of the settlement and the size of the Exchange Offers and Consent Solicitation; our ability to successfully close the previously disclosed commitment facility or receive any proceeds from draws thereunder; the sufficiency of our current liquidity; the expected payment of the interest due on the 2017 Notes prior to the end of the 30-day grace period for payment of interest under the indenture governing the 2017 Notes; our ability to comply with the forbearance agreement with the lender under the Company's senior secured bank credit facility; the volatility of oil and natural gas prices and significantly depressed oil prices since the end of 2014; our indebtedness and the significant amount of cash required to service our indebtedness; our ability to improve our liquidity position and refinance or restructure our indebtedness, including the 2017 Notes and the 2021 Notes; the potential need to sell assets or seek bankruptcy protection; our estimate of the sufficiency of our existing capital sources, including availability under our bank credit facility and the result of any borrowing base redetermination; our ability to post additional collateral to satisfy our offshore decommissioning obligations; our ability to hedge future production to reduce our exposure to price volatility in the current commodity pricing market; ceiling test write-downs resulting, and that could result in the future, from lower oil and natural gas prices; our ability to raise additional capital to fund cash requirements for future operations; limits on our growth and our ability to finance our operations, fund our capital needs and respond to changing conditions imposed by our bank credit facility and restrictive debt covenants; our ability to find, develop and produce oil and natural gas reserves that are economically recoverable and to replace reserves and sustain production; approximately 50% of our production being exposed to the additional risk of severe weather, including hurricanes, tropical storms and flooding, and natural disasters; losses and liabilities from uninsured or underinsured drilling and operating activities; changes in laws and governmental regulations as they relate to our operations; the operating hazards attendant to the oil and gas business; the volatility of our stock price; and our ability to meet the continued listing standards of the New York Stock Exchange with respect to our common stock or to cure any deficiency with respect thereto. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the SEC. The Company undertakes no duty to update or revise these forward-looking statements.
Click here for more information: “http://www.petroquest.com/news.html?=BizID=1690&1=1”
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