Attached files
| file | filename |
|---|---|
| 8-K - Energy XXI Ltd | v204198_8-k.htm |
| EX-99.8 - Energy XXI Ltd | v204198_ex99-8.htm |
| EX-99.1 - Energy XXI Ltd | v204198_ex99-1.htm |
| EX-99.2 - Energy XXI Ltd | v204198_ex99-2.htm |
| EX-99.3 - Energy XXI Ltd | v204198_ex99-3.htm |
| EX-99.5 - Energy XXI Ltd | v204198_ex99-5.htm |
| EX-99.6 - Energy XXI Ltd | v204198_ex99-6.htm |
| EX-99.9 - Energy XXI Ltd | v204198_ex99-9.htm |
| EX-99.7 - Energy XXI Ltd | v204198_ex99-7.htm |
Exhibit
99.4
Recent
Developments
Refinancing of
Existing Secured Notes
On
November 9, 2010, we called for redemption $119.7 million aggregate principal
amount of our 16% Second Lien Junior Secured Notes due 2014 (the “Existing
Secured Notes”) at a redemption price of 110% of the principal amount of such
Existing Secured Notes, plus accrued and unpaid interest, pursuant to the terms
of the indenture governing the Existing Secured Notes. The redemption will be
completed on December 9, 2010.
On
November 29, 2010, we commenced a tender offer (the “Tender Offer”) for all
$222.3 million aggregate principal amount of our Existing Secured Notes that
will remain outstanding after the redemption specified above, plus an additional
$2.2 million aggregate principal amount of such notes that will be issued as
payment-in-kind interest in respect thereof on December 15, 2010. Pursuant to
the Tender Offer, we are offering to purchase for cash any and all of such
Existing Secured Notes validly tendered on or prior to the expiration date of
the Tender Offer for a total consideration to be determined based upon the yield
of a specified U.S. Treasury security as provided in the terms of the Tender
Offer. For tenders made prior to 5:00 p.m., New York City time, on December 16,
2010 (as such date may be extended, the “Early Tender Date”) holders will
receive an additional payment of $30.00 per $1,000 principal amount of Existing
Secured Notes accepted for purchase in the Tender Offer. The Tender Offer is
scheduled to expire at Midnight, New York City time, on December 30, 2010 and is
subject to the satisfaction of certain conditions, including the completion of
this offering and, if applicable, the release of the net proceeds from the
escrow. If the conditions to the Tender Offer have been satisfied on or prior to
the Early Tender Date, we expect to accept for purchase all Existing Secured
Notes validly tendered, and not validly withdrawn, on or prior to the Early
Tender Date and purchase such Existing Secured Notes. Although the exact
purchase price of the Existing Secured Notes will not be known until the price
is determined in accordance with the terms of the Tender Offer, based on market
prices as of November 29, 2010 and assuming settlement of the Tender Offer on
December 17, 2010, the price per $1,000 principal amount of Existing Secured
Notes tendered prior to the Early Tender Date would be approximately $1,140,
plus accrued and unpaid interest to the settlement date.
This
offering is not conditioned upon our completion of the Tender Offer. If any
condition of the Tender Offer is not satisfied, we are not obligated to accept
for purchase, or to pay for, any of the Existing Secured Notes tendered and may
delay acceptance for payment of any tendered Existing Secured Notes, in each
case subject to applicable laws. We may also terminate, extend or amend the
Tender Offer and may postpone the acceptance for purchase of, and payment for
the Existing Secured Notes tendered. This offering memorandum is not an offer to
purchase the Existing Secured Notes. The Tender Offer is made only by and
pursuant to the terms of an Offer to Purchase and the related Letter of
Transmittal, each dated November 29, 2010, as the same may be amended or
supplemented. To the extent we do not purchase all of the outstanding Existing
Secured Notes in the Tender Offer, we intend to redeem any Existing Secured
Notes that remain outstanding following the settlement of the Tender Offer. See
“Use of Proceeds.”
Exchange
of 7.25% Preferred Stock
Since
September 30, 2010 our Parent has issued an aggregate of 9,112,690 shares of its
common stock and paid an aggregate of $11.8 million in cash consideration in
connection with several private exchanges with holders of its outstanding 7.25%
Convertible Perpetual Preferred Stock (the “7.25% Preferred Stock”) and an
exchange offer for such 7.25% Preferred Stock (collectively, the “Exchanges”).
Following the Exchanges, our Parent has 99,100 shares of 7.25% Preferred Stock
outstanding.
Amendments
to Revolving Credit Facility
On
November 17, 2010, we entered into an eighth amendment to our revolving credit
facility (the “Eighth Amendment”). The Eighth Amendment modifies the revolver to
allow for the following: (a) the increase of debt incurrence provisions to allow
for an incremental unsecured debt basket of up to $1.0 billion, (b) the
redetermination of the borrowing base to $700 million, (c) the increase of the
notional amount of the revolving credit facility to $925 million, (d) the
increase of the letter of credit sublimit to $300 million, and (e) the extension
of the maturity date to December 31, 2014. The Eighth Amendment will be deemed
effective when all conditions precedent have been met, including the closing of
the Exxon acquisition and minimum availability under the revolver of $100
million pro forma for the closing and funding of the Exxon acquisition. All
other conditions are customary closing conditions. As of September 30, 2010,
after giving effect to this offering and the application of the proceeds
therefrom as set forth under “Use of Proceeds,” assuming the repurchase or
redemption of all outstanding Existing Secured Notes, and the other transactions
described under “— Recent Developments,” we and the subsidiary guarantors would
have had outstanding approximately $302 million of secured indebtedness and $231
million in outstanding letters of credit under our revolving credit facility, to
which the notes would effectively be junior. In addition, we would have had the
ability to borrow an additional $167 million under such revolving credit
facility.
On
October 15, 2010, we and our lenders entered into a seventh amendment to our
revolving credit facility which modifies our revolving credit facility
to:
|
•
|
allow
for the establishment of a swing line loan commitment in an amount
initially set at $15 million which is carved out of the $350 million
borrowing base. The amounts ultimately available under this swing line
loan can be adjusted upward or downward under certain
conditions;
|
|
•
|
allow
for a total payment by us to our Parent or its subsidiaries of up to $25
million for the purpose of paying premiums or other payments associated
with inducing the early conversion of our 7.25% Preferred Stock;
and
|
|
•
|
allow
for payments by us to our Parent or its subsidiaries of up to $9 million
in any calendar year, subject to certain terms and conditions, so that our
Parent may pay dividends on its outstanding preferred
stock.
|
Concurrent
Preferred Stock and Common Stock Offerings
On
November 5, 2010, our Parent consummated concurrent public offerings (the
“Equity Offerings”) of its common stock and 5.625% convertible perpetual
preferred stock (the “5.625% Preferred Stock”). Pursuant to the Equity
Offerings, our Parent sold 13.8 million shares of its common stock at $20.75 per
share and 1.15 million shares of its 5.625% Preferred Stock at $250 per share,
including over-allotment options for each of the Equity Offerings that were
exercised in full by the underwriters. Our Parent received aggregate net
proceeds from the Equity Offerings, after deducting underwriting discounts and
commissions and expenses, of $554.9 million, a portion of which our Parent used
to repay approximately $91.5 million of borrowings outstanding under our
revolving credit facility and to effect the redemption of a portion of our
Existing Secured Notes, as described below.