Attached files
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EX-4.1 - EX-4.1 - PETROQUEST ENERGY INC | h75508exv4w1.htm |
EX-4.2 - EX-4.2 - PETROQUEST ENERGY INC | h75508exv4w2.htm |
EX-4.3 - EX-4.3 - PETROQUEST ENERGY INC | h75508exv4w3.htm |
EX-99.1 - EX-99.1 - PETROQUEST ENERGY INC | h75508exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
August 19, 2010
August 19, 2010
PETROQUEST ENERGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE (State of Incorporation) |
72-1440714 (I.R.S. Employer Identification No.) |
|
400 E. Kaliste Saloom Rd., Suite 6000 Lafayette, Louisiana (Address of principal executive offices) |
70508 (Zip code) |
Commission File Number: 001-32681
Registrants 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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into Material Definitive Agreement.
First
Supplemental Indenture for
103/8% Senior Notes due 2012
On August 5, 2010, PetroQuest Energy, Inc. (the Company) commenced a cash tender offer (the
Tender Offer) for any and all of its outstanding $150 million aggregate principal amount of its
103/8% Senior Notes due 2012 (the 2012 Notes). In conjunction with the Tender Offer, the Company
solicited consents from holders of the 2012 Notes to effect certain proposed amendments to the
indenture governing the 2012 Notes, including the elimination of substantially all of the
restrictive covenants, certain events of default and certain other provisions. On August 19, 2010,
having received the requisite consents, the Company, PetroQuest Energy, L.L.C., a Louisiana limited
liability company (PQLLC), Pittrans, Inc., an Oklahoma corporation, TDC Energy LLC, a Louisiana
limited liability company (TDC), and The Bank of New York Mellon Trust Company, N.A., as trustee,
entered into the First Supplemental Indenture to effect the foregoing amendments (the 2012 Notes
Supplemental Indenture). The 2012 Notes Supplemental Indenture became operative upon the purchase
by the Company of a majority in aggregate principal amount of the outstanding 2012 Notes on August
19, 2010 pursuant to the terms of the Tender Offer.
A copy of the 2012 Notes Supplemental Indenture is filed as Exhibit 4.1 hereto and is
incorporated herein by reference. The forgoing description of the 2012 Notes Supplemental Indenture
and the transactions contemplated therein does not purport to be complete and is qualified in its
entirety by reference to such document.
Indentures for the 10% Senior Notes due 2017
On August 19, 2010, the Company completed the public offering of $150 million aggregate
principal amount of its 10% Senior Notes due 2017 (the 2017 Notes), which are fully and
unconditionally guaranteed on a senior unsecured basis by PQLLC and TDC (collectively, the
Subsidiary Guarantors).
The terms of the 2017 Notes are governed by the Indenture dated as of August 19, 2010 (the
Base Indenture), between the Company and The Bank of New York Mellon Trust Company, N.A., as
trustee (the Trustee), as supplemented by the First Supplemental Indenture dated as of August 19,
2010 (the 2017 Notes Supplemental Indenture), among the Company, the Subsidiary Guarantors and
the Trustee. The Base Indenture, as amended and supplemented by the 2017 Notes Supplemental
Indenture, is referred to herein as the Indenture.
The Company is obligated to pay the $150 million aggregate principal amount of the 2017 Notes
in cash upon maturity of the 2017 Notes on September 1, 2017. The Company will pay 10% interest per
annum on the principal amount of the 2017 Notes, payable semi-annually in arrears on September 1
and March 1 of each year, starting on March 1, 2011, to holders of record at the close of business
on the preceding February 15 and August 15, respectively. The Company will pay interest on overdue
principal at 1% per annum in excess of the above rate and will pay interest on overdue installments
of interest at such higher rate to the extent lawful.
The 2017 Notes are senior unsecured obligations of the Company, and will rank (i) senior in
right of payment to all of the Companys existing and future subordinated indebtedness, (ii) pari
passu in right of payment with any of the Companys existing and future unsecured indebtedness that
is not by its terms subordinated to the 2017 Notes, (iii) effectively junior to the Companys
existing and future secured indebtedness, including indebtedness under the Companys senior secured
bank credit facility, to the extent of the assets securing such indebtedness, and (iv) structurally
subordinate to all future indebtedness and other liabilities (other than indebtedness and
liabilities owed to the Company) of the Companys non-guarantor subsidiaries. The guarantees will
be effectively subordinated to all secured indebtedness of the Subsidiary Guarantors to the extent
of the assets securing such indebtedness.
Subject to compliance with the covenant regarding indebtedness, the Company may issue more
2017 Notes from time to time under the Indenture (the Additional Notes). The Notes and the
Additional Notes, if any, will be treated as a single class for all purposes of the Indenture,
including waivers, amendments, redemptions and offers to purchase.
Except as set forth below, the Company will not be entitled to redeem the 2017 Notes prior to
September 1, 2014. On and after September 1, 2014, the Company will be entitled to redeem all or a
portion of the 2017 Notes at the redemption prices, plus accrued interest to the redemption date,
if redeemed during the 12-month period commencing on September 1 of the years set forth below:
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Period | Redemption Price | |||
2014 |
105.000 | % | ||
2015 |
102.500 | % | ||
2016 |
100.000 | % |
At any time prior to September 1, 2013 the Company may redeem up to 35% of the aggregate
principal amount of the 2017 Notes issued under the Indenture with the net cash proceeds of certain
equity offerings at a redemption price of 110% of the principal amount of the 2017 Notes plus any
accrued and unpaid interest, if any, to the redemption date, subject to certain conditions.
In addition, prior to September 1, 2014, the Company is entitled at its option to redeem the
2017 Notes (which includes Additional Notes, if any), in whole or in part, at a redemption price
equal to 100% of the principal amount of the 2017 Notes plus the Applicable Premium (as defined in
the Indenture) as of, and accrued and unpaid interest to, the redemption date (subject to the right
of holders of the 2017 Notes of record on the relevant record date to receive interest due on the
relevant interest payment date).
If the Company experiences a Change of Control (as defined in the Indenture), the Company will
be required to make an offer to repurchase the 2017 Notes at a price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest to the date of repurchase.
Each of the following events will constitute an event of default under the Indenture:
| a default in the payment of interest on the 2017 Notes when due, continued for 30 days; | ||
| a default in the payment of principal of any 2017 Note when due at its stated maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise; | ||
| the failure by the Company to comply with its obligations under the covenant regarding merger and consolidation, as provided in the Indenture; | ||
| the failure by either Company to comply for 30 days after notice with any of its obligations in the covenants regarding change of control (other than a failure to purchase 2017 Notes), limitation on indebtedness, limitation on restricted payments, limitation on restrictions on distributions from restricted subsidiaries, limitation on sales of assets and subsidiary stock (other than a failure to purchase 2017 Notes), limitation on affiliate transactions, limitation on liens, limitation on sale/leaseback transactions, or future guarantors; | ||
| the failure by the Company or any Subsidiary Guarantor to comply for 60 days (or 120 days in the case of the Companys obligations under the covenant regarding Securities and Exchange Commission (the Commission) reports) after notice with its other agreements contained in the Indenture; | ||
| indebtedness of the Company, any Subsidiary Guarantor or any significant subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such indebtedness unpaid or accelerated exceeds $10 million; | ||
| certain events of bankruptcy, insolvency or reorganization of the Company, any Subsidiary Guarantor or any significant subsidiary; | ||
| any judgment or decree for the payment of money in excess of $10 million is entered against the Company, a Subsidiary Guarantor or any significant subsidiary, remains outstanding for a period of 60 consecutive days following such judgment and is not discharged, waived or stayed; or | ||
| a subsidiary guaranty ceases to be in full force and effect (other than in accordance with the terms of such subsidiary guaranty) or a Subsidiary Guarantor denies or disaffirms its obligations under its subsidiary guaranty (other than in accordance with the terms of such subsidiary guaranty). |
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However, a default under the fourth and fifth bullet points above will not constitute an event
of default until the Trustee or the holders of 25% in principal amount of the outstanding 2017
Notes notify the Company of the default and the Company does not cure such default within the time
specified after receipt of such notice.
If an event of default occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the outstanding 2017 Notes may declare the principal of and accrued but unpaid
interest on all of the 2017 Notes to be due and payable. Upon such a declaration, such principal
and interest shall be due and payable immediately. If an event of default relating to certain
events of bankruptcy, insolvency or reorganization occurs and is continuing, the principal of and
interest on all the 2017 Notes will ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any holders of the 2017 Notes. Under
certain circumstances, the holders of a majority in principal amount of the outstanding 2017 Notes
may rescind any such acceleration with respect to the 2017 Notes and its consequences.
Other material terms of the 2017 Notes, the Base Indenture and the 2017 Notes Supplemental
Indenture are described in the prospectus supplement, dated August 12, 2010, as filed by the
Company with the Commission on August 13, 2010. Copies of the Base Indenture and the 2017 Notes
Supplemental Indenture are filed as Exhibits 4.2 and 4.3 hereto and are incorporated herein by
reference. The forgoing description of the Base Indenture and the 2017 Notes Supplemental Indenture
and the transactions contemplated therein does not purport to be complete and is qualified in its
entirety by reference to such documents.
The Company and the Subsidiary Guarantors registered the sale of the 2017 Notes and the
underlying subsidiary guarantees with the Commission pursuant to a shelf Registration Statement on
Form S-3 (Registration No. 333-158446) that was declared effective on July 23, 2009 (the
Registration Statement). The Company received net proceeds from the offering of the 2017 Notes of
approximately $146.2 million, after deducting underwriting discounts and commissions and estimated
offering expenses. The Company used a portion of the net proceeds to fund the initial settlement of
the 2012 Notes in the Tender Offer. The Company intends to use the remaining net proceeds, together
with cash on hand, to redeem or repurchase any of the 2012 Notes not tendered in the Tender Offer.
Certain of the underwriters of the 2017 Notes and their affiliates have in the past provided, and
may in the future provide, investment banking, commercial banking and financial advisory services
to the Company and its affiliates in the ordinary course of business. Specifically, affiliates of
certain of the underwriters serve various roles in the Companys senior secured bank credit
facility. In addition, the Companys oil and natural gas price hedges at June 30, 2010 are placed
with the commodity trading branches of affiliates of certain of the underwriters.
As previously reported, on August 12, 2010, the Company and the Subsidiary Guarantors entered
into an underwriting agreement with J.P. Morgan Securities Inc., as representative of the several
underwriters named therein, in connection with the underwritten public offering of the 2017 Notes.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
The information provided under Item 1.01 in this Current Report on Form 8-K regarding the 2017
Notes, the Base Indenture and the 2017 Notes Supplemental Indenture and the related subsidiary
guarantees is incorporated by reference into this Item 2.03.
Item 3.03. Material Modification to Rights of Security Holders.
The information provided under Item 1.01 in this Current Report on Form 8-K regarding the 2012
Notes and the 2012 Notes Supplemental Indenture is incorporated by reference into this Item 3.03.
Item 7.01 Regulation FD Disclosure
On August 19, 2010, the Company issued a news release announcing the results of the
Tender Offer. The news release is filed as Exhibit 99.1 to this Form 8-K, and is incorporated
herein by reference.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the foregoing information,
including Exhibit 99.1, shall not be deemed filed for the purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall
such information and Exhibit be deemed incorporated by
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reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing
Item 9.01 Financial Statements and Exhibits
(d) | Exhibits: |
4.1
|
First Supplemental Indenture, dated August 19, 2010, among PetroQuest Energy, Inc., the Subsidiary Guarantors identified therein, and The Bank of New York Mellon Trust Company, N.A. | |
4.2
|
Indenture, dated August 19, 2010, between PetroQuest Energy, Inc. and The Bank of New York Mellon Trust Company, N.A. | |
4.3
|
First Supplemental Indenture, dated August 19, 2010, among PetroQuest Energy, Inc., the Subsidiary Guarantors identified therein, and The Bank of New York Mellon Trust Company, N.A. | |
99.1
|
News Release dated August 19, 2010. |
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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 thereunto duly authorized.
PETROQUEST ENERGY, INC. |
||||
Date: August 19, 2010 | By: | /s/ J. Bond Clement | ||
J. Bond Clement | ||||
Executive Vice President, Chief Financial Officer and Treasurer | ||||
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