Attached files
| file | filename |
|---|---|
| EX-4.1 - EXHIBIT 4.1 - PETROQUEST ENERGY INC | exhibit41-indenture10secon.htm |
| EX-10.1 - EXHIBIT 10.1 - PETROQUEST ENERGY INC | exhibit101toform8-kxcollat.htm |
| EX-10.2 - EXHIBIT 10.2 - PETROQUEST ENERGY INC | exhibit102toform8-kxpetroq.htm |
| EX-4.2 - EXHIBIT 4.2 - PETROQUEST ENERGY INC | exhibit42toform8-kxregistr.htm |
UNITED 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):
February 17, 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
Exchange Offer and Consent Solicitation
On February 17, 2016, PetroQuest Energy, Inc. (the “Company”) completed a private offering to exchange (the “Exchange Offer”) up to $300 million aggregate principal amount of the Company’s outstanding 10% Senior Notes due 2017 (the “Old Notes”) and related consent solicitation (the “Consent Solicitation”) to amend and waive certain provisions of the indenture governing the Old Notes. At the closing, and in satisfaction of the consideration for $214,379,000 in aggregate principal amount of the Old Notes, representing approximately 61% of the outstanding aggregate principal amount of Old Notes, validly tendered (and not validly withdrawn) in the Exchange Offer, the Company (i) paid approximately $53.6 million of cash, (ii) issued $144,674,000 aggregate principal amount of its newly issued 10% Second Lien Senior Secured Notes (the “New Notes”) and (iii) issued 4,287,580 shares of its common stock (the “Shares”). The Exchange Offer and Consent Solicitation was made only to holders of Old Notes (i) in the United States, who are “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), 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 (ii) 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.
Indenture for the 10% Second Lien Senior Secured Notes due 2017
The terms of the New Notes are governed by the Indenture dated as of February 17, 2016 (the “Indenture”), among the Company, PetroQuest Energy, L.L.C., a Louisiana limited liability company (“PQLLC”) and wholly owned subsidiary of the Company, and TDC Energy LLC, a Louisiana limited liability company (“TDC” and, together with PQLLC, the “Subsidiary Guarantors”) and wholly owned subsidiary of the Company, and Wilmington Trust, National Association, as trustee (the “Trustee”). The Indenture contains affirmative and negative covenants that, among other things, limit the ability of the Company and the Subsidiary Guarantors to incur indebtedness; purchase or redeem stock; make certain investments; create liens that secure debt; enter into transactions with affiliates; sell assets; refinance certain indebtedness; merge with or into other companies or transfer substantially all of their assets; and, in certain circumstances, to pay dividends or make other distributions on stock. The Indenture also contains customary events of default. Upon the occurrence of certain events of default, the Trustee or the holders of the New Notes may declare all outstanding New Notes to be due and payable immediately. The New Notes are fully and unconditionally guaranteed on a senior basis by the Subsidiary Guarantors and by certain future subsidiaries of the Company.
The Company is obligated to pay the $214,379,000 aggregate principal amount of the New Notes in cash upon maturity of the New Notes on February 15, 2021. The Company will pay 10% interest per annum on the principal amount of the New Notes, semi-annually in arrears on February 15 and August 15 of each year, starting on August 15, 2016, to holders of record at the close of business on the preceding February 1 and August 1, 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 New Notes are secured by second-priority liens on substantially all of the Company’s and the Subsidiary Guarantors’ oil and gas properties and substantially all of their other assets to the extent such properties and assets secure the Company’s senior secured bank credit facility (except for certain excluded assets) (the “Collateral”). Pursuant to the terms of the Intercreditor Agreement (as defined below), the security interest in those properties and assets that secure the New Notes and the guarantees are contractually subordinated to liens that secure the Company’s senior secured bank credit facility and certain other permitted indebtedness. Consequently, the New Notes and the guarantees will be effectively subordinated to the senior secured bank credit facility and such other indebtedness to the extent of the value of such assets.
Subject to compliance with the covenant regarding indebtedness, the Company may issue more New Notes from time to time under the Indenture (the “Additional Notes”). The New 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 New Notes prior to February 15, 2018. On and after February 15, 2018, the Company will be entitled to redeem all or a portion of the New Notes at the redemption prices, plus accrued interest to the redemption date, if redeemed during the 12-month period commencing on February 15 of the years set forth below:
Period Redemption Price
2018 105.0%
2019 102.5%
2020 and thereafter 100.0%
At any time prior to February 15, 2018, the Company may redeem, at its option, up to 35% of the aggregate principal amount of the New Notes issued under the Indenture (which includes Additional Notes, if any) with the net cash proceeds of certain equity offerings at a redemption price of 110% of the principal amount of the New Notes plus any accrued and unpaid interest, if any, to the redemption date, subject to certain conditions.
In addition, prior to February 15, 2018, the Company is entitled at its option to redeem the New 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 New 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 New 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 New Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase.
The foregoing description of the Indenture is not complete and is qualified by reference to the complete document, which is filed as Exhibit 4.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Collateral Trust Agreement
On February 17, 2016, in connection with the Indenture, the Company, the Subsidiary Guarantors, the Trustee, the other Parity Lien Debt Representatives from time to time party thereto and Wilmington Trust, National Association, as the collateral trustee (the “Collateral Trustee”), entered into a collateral trust agreement (the “Collateral Trust Agreement”), pursuant to which the Collateral Trustee will receive, hold, administer, maintain, enforce and distribute the proceeds of all liens upon any property of the Company, or any Subsidiary Guarantor at any time held by it, in trust for the benefit of the current and future holders of the parity lien obligations.
The foregoing description of the Collateral Trust Agreement is not complete and is qualified by reference to the complete document, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Intercreditor Agreement
On February 17, 2016, the Collateral Trustee and JPMorgan Chase Bank, N.A. entered into an intercreditor agreement (the “Intercreditor Agreement”) to govern the relationship of holders of the New Notes and holders of other parity lien debt (if any), the lenders under the Company’s senior secured bank credit facility and holders of other priority lien debt (if any) and holders of the Company’s junior lien debt (if any) with respect to Collateral and certain other matters.
The foregoing description of the Intercreditor Agreement is not complete and is qualified by reference to the complete document, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
Registration Rights Agreement
In connection with the issuance of the New Notes in the Exchange Offer, on February 17, 2016, the Company and the Subsidiary Guarantors entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Seaport Global Securities LLC, as the representative of the holders of the New Notes, obligating the Company to use commercially reasonable efforts to file an exchange registration statement with the Securities and Exchange Commission so that holders of the New Notes can offer to exchange the New Notes issued in the offering for registered notes (the “Exchange Notes”) having substantially the same terms as the New Notes (evidencing the same indebtedness as the New Notes). In addition, under certain circumstances and in lieu of a registered exchange offer, the Company must use commercially reasonable efforts to file a shelf registration statement for the resale of the New Notes.
If the exchange offer is not completed within 365 days after February 17, 2016, or, if a shelf registration statement is required and is not declared effective on or prior to the later of the 365th day after February 17, 2016 and the 180th day after delivery of a shelf registration request, then the annual interest borne by the New Notes will be increased by 0.25% per annum for the first 90-day period on the day immediately following the breach, which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such interest continues to accrue, provided that the rate at which such additional interest accrues may not exceed 1.0% per annum.
The foregoing description of the Registration Rights Agreement is not complete and is qualified by reference to the complete document, which is filed as Exhibit 4.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information provided under Item 1.01 in this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securites
The information provided under Item 1.01 in this Current Report on Form 8-K regarding the Shares is incorporated by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description of Exhibit
4.1 | Indenture, dated February 17, 2016, among PetroQuest Energy, Inc., the Subsidiary Guarantors identified therein, and Wilmington Trust, National Association. |
4.2 | Registration Rights Agreement, dated February 17, 2016, among PetroQuest Energy, Inc., the Subsidiary Guarantors identified therein, and Seaport Global Securities LLC. |
10.1 | Collateral Trust Agreement, dated February 17, 2016, among PetroQuest Energy, Inc., the guarantors from time to time party thereto, Wilmington Trust, National Association, as Trustee, the other Parity Lien Debt Representatives from time to time party thereto and Wilmington Trust, National Association, as Collateral Trustee. |
10.2 | Intercreditor Agreement, dated February 17, 2016, by and between JPMorgan Chase Bank, N.A., as Priority Lien Agent, and Wilmington Trust, National Association, as Second Lien Collateral Trustee. |
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: February 18, 2016
PETROQUEST ENERGY, INC.
/s/ J. Bond Clement
J. Bond Clement
Executive Vice President, Chief Financial Officer and Treasurer