Escalera Resources Co.

Escalera Resources Co.'s exchange filed to remove a class of its securities from listing.

listing compliance notice

On November 5, 2015 the company filed for Chapter 11 bankruptcy in the District of Colorado (Case No. 15-22395-TBM) and will keep operating as debtor-in-possession. It says it has an agreement on use of cash collateral and wants flexibility to pursue asset sales or other alternatives to maximise value. This follows the lender default and negotiation agreement. Separately, Nasdaq notified it on November 2 of an equity shortfall for the Series A Preferred, which it expects to be delisted without contesting. The filing gives no plan or outcome for common or preferred shareholders yet.

bankruptcy or receivership

Escalera Resources Co.'s securities were notified for removal from listing and registration on its exchange.

listing compliance notice

On October 7, 2015 the company said it would voluntarily delist its common stock from the Nasdaq Capital Market, planning to file Form 25 around October 19 with delisting about 10 days later, and expects trading on OTC Pink. It cited Nasdaq non-compliance letters, its stockholders' equity and share price, and the likelihood of continued non-compliance given its lack of capital raising opportunities and current liquidity position. It chose not to submit the compliance plan, ending the Nasdaq listing problems described in earlier notices. It will keep filing SEC reports.

listing compliance notice

On September 22, 2015 the company signed a Negotiation Agreement with its credit facility lenders to hold detailed talks on liquidity, cash flows and insolvency, and nothing discussed is binding until a written agreement is signed. The company acknowledged several events of default under the credit facility, and the lenders are released from any further lending. The lenders will introduce potential partners, investors or lenders, and the company must advance $50,000 for the lenders' financial advisor. The forbearance period set out in the July 31 agreement ran to September 1, 2015 and this filing does not say what happened to it.

material agreement

On August 20, 2015 Nasdaq told the company it fell short of the $2.5 million minimum stockholders' equity rule, after the June 30 quarterly report showed a stockholders' deficit of $7.97 million. The company has until October 5, 2015 to submit a compliance plan (up to February 16, 2016 if accepted). The filing also says the stock moved to the Nasdaq Capital Market on July 23, 2015 over the $1.00 bid price rule, with until January 17, 2016 to comply. This adds to the earlier bid-price and public float notices; delisting is possible if none is resolved.

listing compliance notice

On July 31, 2015 the company completed the $12.0 million sale of its Mesa Units interests to Vanguard, resolving the July 16 agreement, and used $10.5 million to repay credit facility borrowings. That did not materially reduce a borrowing base deficiency of about $3.5 million after the base was cut from $50 million to $44 million. The same day it signed a forbearance agreement under which lenders will hold off on accelerating debt, enforcing security or filing an involuntary bankruptcy until the earlier of September 1, 2015 or a termination event. The covered defaults include a March 31, 2015 covenant violation and a going-concern paragraph in the 2014 10-K. Conditions include more mortgages on Wyoming properties and midstream assets and unwinding some 2015 hedges.

asset acquisition disposition

On July 16, 2015 the company agreed to sell its interests in the Mesa Units on the Pinedale Anticline in southwestern Wyoming to Vanguard Operating, LLC for $12.0 million cash, subject to adjustments. Closing was expected July 31, 2015, with proceeds to reduce debt under its credit agreement.

material agreement

On April 30, 2015 Nasdaq notified the company that the market value of its publicly held shares had been below the $5 million minimum for 30 consecutive business days for the Global Select Market. It has until October 27, 2015 to regain compliance, after which delisting could follow with a right to appeal. The filing says moving to another market such as the Nasdaq Capital Market could remedy it. This is a second listing problem alongside the January bid-price notice.

listing compliance notice

On January 20, 2015 Nasdaq notified the company that its shares closed below the $1.00 minimum bid price for 30 consecutive business days. It has until July 20, 2015 to regain compliance, by closing at $1.00 or more for 10 straight business days, with a possible further 180 days to January 17, 2016 if it meets other standards. This is a delisting risk for shareholders.

listing compliance notice

Effective August 29, 2014 the company signed a new credit agreement with Societe Generale: a $250 million commitment, $50 million initial borrowing base secured on its gas and oil properties, maturing August 28, 2017. It terminated the Bank of Oklahoma agreement, which resolves the April 2014 borrowing base squeeze, and settled hedges for $1.0 million net proceeds. Structuring fees were $875,000, and covenants include a net leverage ratio below 4.0:1. The press release says the refinancing is meant to support acquiring more producing gas properties.

debt financing

On April 24, 2014 (now filing as Escalera Resources Co.) the company agreed a sixth amendment to its credit agreement cutting the borrowing base to $48.5 million, with $1 million monthly reductions until the October 1, 2014 redetermination, when it will be $42.5 million. On April 25 it also received a non-binding term sheet from an international financial institution for a credit facility of up to $70 million, $55 million of it committed, with no assurance it will be obtained.

material agreement

On August 16, 2012 the company agreed to buy Anadarko's gas producing assets in the Atlantic Rim area of the Eastern Washakie Basin, adding to its Catalina Unit and Spy Glass Hill Unit interests. The price is expected to be roughly $6 million to $17 million depending on whether other owners use preferential purchase rights, with closing expected in September 2012. It also agreed to buy WGR Asset Holding's 50% interest in gas gathering pipelines in Spy Glass Hill for up to $4 million, which will not happen if the other pipeline owner exercises its 60-day purchase right; closing is expected in Q4 2012.

material agreement

Effective October 24, 2011 a third amendment extended the credit facility's maturity to October 24, 2016 and doubled the total facility from $75 million to $150 million. The borrowing base stays at $60 million, interest margin tiers are lowered, and a $260,000 structuring fee was paid. This pushes out the earlier January 2013 maturity.

debt financing

On February 5, 2010 Double Eagle signed an Amended and Restated Credit Agreement with Bank of Oklahoma and other lenders, extending the credit facility's maturity from July 31, 2010 to January 31, 2013. The facility stays at $75 million with a $45 million current credit line (borrowing base). This replaces the 2009 agreement, and Petrosearch Energy (acquired in August 2009) now guarantees the loans alongside Eastern Washakie Midstream. A $450,000 structuring fee was paid, and interest has a 4.50% floor. Key covenants: current ratio 1:1, EBITDAX to interest plus dividends 1.5:1, and funded debt to EBITDAX 3.5:1.

debt financing

On August 6, 2009 Double Eagle completed its acquisition of Petrosearch Energy, which became a wholly-owned subsidiary, resolving the merger agreed on March 30. The exchange ratio was 0.0433 Double Eagle share per Petrosearch share, and Double Eagle's closing price of $4.1235 (below $4.75) triggered a cash payment. After a $249,716 working-capital shortfall deduction, the cash is $873,436, or $0.0211 per Petrosearch share. Richard Dole led both companies, so independent board committees at each approved the terms. Double Eagle holders keep their shares, and the new shares issued to Petrosearch holders dilute them (inference). Financial statements and pro forma figures are to follow by amendment.

asset acquisition disposition

On July 22, 2009 the company amended its February 2009 Bank of Oklahoma credit agreement. The term loan is ended and its $3.5 million balance moves into the revolving loan, so it is no longer due July 31, 2009. The revolver's borrowing base rises from $40 million to $45 million, and a new covenant limits debt relative to EBITDAX (an earnings measure). This resolves the near-term repayment of the term loan, but adds a new covenant to keep meeting.

debt financing

Double Eagle filed the registration statement (Form S-4) for the shares it would issue to buy Petrosearch, registering up to 1,792,741 new shares plus 33,660 shares for assumed Petrosearch warrants. Petrosearch holders would get 0.0433 of a Double Eagle share per Petrosearch share, and they still have to vote on it. The meeting date and Double Eagle's share price are left blank in this draft. This continues the March 30 merger agreement, and the new shares mean existing Double Eagle holders would be diluted (inference).

business combination

On March 30, 2009 the company agreed to acquire Petrosearch Energy Corporation by merging a subsidiary into it, paying in Double Eagle shares: 1,792,741 shares in total unless adjusted (the share count rises or falls with the share price, with a floor of 1,100,000 shares, and extra cash is payable if the price is below $4.75). The deal is subject to Petrosearch stockholder approval, carries a $300,000 termination fee in some cases, and has an August 31, 2009 outside date; Richard Dole stays Chairman, President and CEO and recused himself from the board vote. Petrosearch's holders would get new Double Eagle shares, so existing shareholders would be diluted (inference).

business combination

On February 26, 2009 the company signed a new credit agreement led by Bank of Oklahoma with a $75 million total facility, limited to a $45 million borrowing base ($5 million term loan due July 31, 2009 and $40 million revolver due July 31, 2010). The term loan proceeds repay the existing revolving loan, and the loans are secured by a lien on substantially all assets and guaranteed by subsidiary Eastern Washakie Midstream, LLC. This replaces the earlier American National Bank line.

debt financing

The board adopted a shareholder rights plan (a 'poison pill') on August 21, 2007, issuing one right per common share on September 4, 2007, with Computershare as rights agent. The rights become exercisable if a person acquires 20% or more of the common stock or launches a qualifying tender offer, letting other holders buy shares at a discount, and they expire August 24, 2010 unless extended or redeemed at $0.01 per right. Such plans typically make a hostile takeover harder (general effect, not stated in the filing).

security holder rights change

Effective July 1, 2007, the company raised its borrowing base with American National Bank from $25,000,000 to $35,000,000 on its $50,000,000 line, while raising the required minimum stockholders' equity covenant from $22,500,000 to $27,500,000. It also closed an offering of 1,610,000 shares of 9.25% Series A Cumulative Preferred Stock on July 5, 2007; if preferred dividends go unpaid, the company's ability to pay common dividends is restricted.

security holder rights change

Nasdaq certified Escalera Resources Co.'s securities for listing, clearing them to begin trading.

listing compliance notice

Effective August 1, 2006, the company increased its line of credit with American National Bank from $9,000,000 to $50,000,000, with an initial borrowing base of $25,000,000 and a new maturity of July 31, 2010. This gives it much more borrowing capacity, though the amount actually drawn is not stated.

material agreement