GEOKINETICS INC

GEOKINETICS INC deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

On March 13, 2013, after the Bankruptcy Court's March 12 interim order, the company signed a debtor-in-possession loan agreement for up to $25 million at 9.25% interest with lenders who hold over 70% of the senior secured notes (Cantor Fitzgerald as agent). The loans are to be paid in stock of the reorganized company under the plan or repaid by the earliest of four months after signing, acceleration, or the plan's effective date, and they rank ahead of the noteholders' liens. This is the financing described in the bankruptcy filing and adds to the dilution of the post-reorganization stock.

debt financing

On March 10, 2013 the company and its domestic subsidiaries filed Chapter 11 petitions in Delaware to carry out the pre-packaged plan agreed in January, which the filing says was approved by a large majority of stakeholders but still needs court approval. The filing triggered automatic acceleration of the $50M credit facility and the $300M 9.75% notes, though enforcement is stayed, and a second amendment gave extra time (45 days to confirm, 60 to take effect). The plan as previously described gives noteholders all the new common stock and cancels existing common, so this continues the wipe-out of current shareholders; the filing itself does not say the plan is confirmed.

bankruptcy or receivership

On January 15, 2013 the company signed a Restructuring Support Agreement with holders of over 70% of its $300M 9.75% senior secured notes and with Avista, the largest preferred holder. The planned Chapter 11 plan would swap the notes for 100% of the new common stock (subject to dilution from a management incentive plan and up to $25M of debtor-in-possession financing converting to stock), repay the $50M credit facility from an exit financing, pay general unsecured claims in full, and cancel all preferred stock with a cash payment to holders of certain preferred. Existing common shareholders would receive no distributions and their shares would be canceled. This follows the December 2012 delisting and puts the company on the path to Chapter 11; the plan remains subject to court approval and other conditions.

material agreement

GEOKINETICS INC's exchange filed to remove a class of its securities from listing.

listing compliance notice

After the company submitted its compliance plan on November 30, 2012, NYSE MKT rejected it on December 18 and began delisting, also citing a further standard (Section 1003(a)(iv)). The company does not intend to appeal; trading is halted and is to be suspended before the open on December 27, 2012, and the stock can only be quoted over-the-counter if a market maker files a Form 211 that FINRA approves, which is not assured. This resolves the listing-compliance thread negatively. A new CEO, David J. Crowley, is named as the press release contact (inference: he replaced Richard Miles).

listing compliance notice

On October 23, 2012 NYSE MKT told the company it fails continued listing standards because its stockholders' equity is below the required levels and it has had net losses in recent years. It must submit a plan by November 23, 2012 to regain compliance by April 23, 2014, and the company was still evaluating whether it could submit one; without an accepted plan, delisting proceedings begin.

listing compliance notice

On March 15, 2012 the company agreed to sell certain North American seismic data to Seismic Exchange, Inc. for $10M cash, keeping 75% of net revenues from the data until it receives $2M or March 7, 2017, then 50%. Separately, on March 16 Avista committed to buy up to $10M more of the 9.75% notes (plus foreign loan facilities) through Jan 1, 2013, for a $300,000 fee and warrants over 190,000 shares per period at a $0.01 exercise price. Closing of the data sale was still subject to conditions.

capital raising announcement

On August 29, 2011 the company issued 1,041,668 common shares at $3.84 to the new lenders to pay the $4.0M advisory fee from the August credit facility. Because that price was below existing conversion and exercise prices, the Series B preferred conversion price fell to $15.95, the 2008 warrants' exercise price to $9.05, and the 2010 warrants' exercise price to $3.84, which dilutes existing common shareholders.

capital raising announcement

On August 12, 2011 the company replaced the RBC revolver (held since May by the Whitebox-led lenders) with a new $50.0M amended and restated credit facility, repaying the $50.0M drawn and terminating the old facility. The new loan bears fixed 11.125% interest, matures September 1, 2014, has no financial maintenance covenants and no letters of credit; fees were $1.7M cash plus $0.8M other costs, and a $4.0M advisory fee payable in new common shares, which resolves the forbearance deadline of Aug 22, 2011. The 8-K also furnishes the Q2 2011 results press release (revenue $145.5M).

debt financing

On May 24, 2011 the existing RBC revolver lenders assigned their positions to a new lender group with Whitebox Advisors as successor agent. Under Forbearance Agreement and Amendment No. 5, the facility rose to $50M, the company borrowed the full $50M, no more letters of credit will be issued, and the lenders agreed to hold off on remedies for specified defaults until the earlier of August 22, 2011 or an amended and restated credit agreement. Fees are payable to the new lenders and agent. The need for forbearance shows defaults existed under the facility; this continues the waiver sequence, now with new lenders and a short deadline.

debt financing

On April 1, 2011 the RBC lenders waived the company's failure to deliver audited 2010 financial statements by March 31, but only until April 15, 2011. Amendment No. 4 also resets EBITDA and leverage covenants, requires a plan to address material weaknesses and monitor project economics, shortens the revolver maturity from February 12, 2013 to April 15, 2012, changes interest cost, and adds closing and commitment fees. The same filing furnished 2010 results: Q4 revenue $198.8M, full-year revenue $558.1M (up 9%), full-year EBITDA $22.8M versus $87.0M in 2009, and a $147.5M loss to common holders ($8.46 per share). Management cited cancelled or delayed jobs, crews held on standby, decentralised PGS Onshore integration and a roughly $14M loss on an Indonesia job. Backlog was $558M. This continues the covenant waiver thread and the earlier restatement and weakness issues.

material agreement

On December 14, 2010, Geokinetics closed a $30M private placement of 120,000 Series D junior preferred shares plus warrants over 3,495,000 common shares (exercise price $9.64, expiring December 2016). Buyers were Avista, PGS, Levant and other existing holders, including directors Webster, Ziegler and a trust affiliated with Harte. The preferred pays 10.50% cash or 11.50% if accrued and must be redeemed December 15, 2016. The press release says proceeds will repay debt and fund general corporate purposes. A special committee of independent directors approved it after receiving a fairness opinion. Separately, Amendment No. 3 to the RBC credit agreement waived the November 2010 EBITDA test and all covenants at December 31, 2010. It sets new monthly tests through 2011, caps 2011 capital spending at $40M, and ties revolver availability to a borrowing base, with $29M outstanding of a $40M limit. A registration rights amendment lets warrant holders demand repurchase on a public common stock offering. This continues the covenant problems flagged in October; the new preferred and warrants add dilution potential for common holders.

capital raising announcement

On September 30, 2010, the RBC lenders waived the leverage, interest coverage and fixed charge covenant defaults that would otherwise have occurred for the September 2010 quarter. In exchange, new monthly minimum revenue ($50M, $60M, $60M) and cumulative adjusted EBITDA ($7.9M, $17.6M, $30.1M) tests apply through November 30, 2010. The revolver limit stays at $40M with $26M outstanding (up from $9M at June 30). The filing says covenants beyond November 2010 are not set and the company is in talks with lenders about the likelihood of non-compliance in future periods. This continues the June 2010 covenant relief, and the problem is now a waiver rather than a loosening.

material agreement

The company said its 2009 quarterly and annual results and its first-quarter 2010 results cannot be relied on, because it did not correctly account for the conversion feature of its Series B-1 and B-2 preferred stock and the warrants tied to Series B-2. These should have been recorded as liabilities at fair value, with value changes flowing through earnings. The company says the corrections are non-cash and do not affect cash or EBITDA, and it will file amended 10-K and 10-Q reports.

financial restatement

On June 30, 2010 Geokinetics amended the $50M RBC revolving credit facility it took on with the PGS deal. Lenders loosened the leverage, interest coverage and fixed charge covenants for the June and September 2010 quarters, but the interest rate rises by 1.0% and the maximum borrowing drops from $50 million to $40 million; $9 million was drawn at June 30. The need for covenant relief shortly after the acquisition is an inference; the filing itself presents it as added flexibility.

material agreement

The PGS Onshore acquisition closed on February 12, 2010. The price was $210 million less a $2.8 million working capital adjustment (subject to further adjustment), paid as $183.9 million cash plus 2,153,616 new shares (valued at $12.11, or $26.1 million; about 12% of current shares). The cash came from the $300 million notes released from escrow; the PNC facility was repaid and terminated and replaced with a new $50 million RBC revolving credit facility. PGS can name two directors (none named yet), and the Series B and Series C preferred terms were amended as planned. This resolves the pending acquisition and financing threads.

asset acquisition disposition

On December 23, 2009 Geokinetics' subsidiary Geokinetics Holdings USA closed a private sale of $300 million of 9.75% senior secured notes due December 15, 2014, issued at 98.093% of face value and guaranteed by Geokinetics Inc. and certain subsidiaries. This is the capital markets debt financing planned alongside the PGS Onshore purchase; the filing itself does not say how the money will be used.

material agreement

Geokinetics agreed on December 14, 2009 to sell 4,000,000 new common shares at $9.25 each through underwriters led by RBC Capital Markets, with a 30-day option for up to 600,000 more. The press release says net proceeds should be about $34.8 million (before any extra shares) and will go toward the cash price of the PGS Onshore purchase, with any remainder for general purposes. The offering is not conditional on the PGS deal closing, and it dilutes existing shareholders.

material agreement

On December 3, 2009 Geokinetics agreed to buy the onshore seismic data acquisition and multi-client data library business of Petroleum Geo-Services (PGS) for about $210 million: $183.9 million in cash plus roughly 2.15 million shares valued at $12.11 each ($26.1 million). Closing is expected in the first quarter of 2010, with a February 15, 2010 termination date. Geokinetics also received a $275 million bridge financing commitment from RBC Capital Markets, conditional on closing, and says it expects to repay most or all of its existing debt. To support the financing it amended the Series B preferred: the B-1 coupon rises from 8% to 9¾% with conversion price cut from $25 to $20, and the B-2 is to be exchanged for non-convertible redeemable preferred with a coupon of about 12%. B-2 holders also get 750,000 common shares and Avista Capital Holdings and Levant America get a 2% cash fee. After closing PGS becomes the second-largest shareholder after Avista affiliates.

material agreement

On July 28, 2008 Geokinetics sold Avista Capital Partners entities 120,000 shares of new Series B-2 convertible preferred stock plus five-year warrants for 240,000 common shares at $20.00, for $30 million in total. This adds to the Series B preferred first issued to Avista in December 2006, whose conversion terms are now stated: each preferred share converts into 10 common shares at the holder's option. The press release says 377,526 Series B shares are outstanding and the Series B holders have about 38% of the voting stock as-converted, so common shareholders are diluted. Proceeds are intended for the raised $80 million capital budget, working capital and general corporate purposes.

capital raising announcement

On June 26, 2008 Geokinetics and PNC Bank amended the PNC credit agreement so the credit line can fund up to $80.0 million of 2008 capital spending (up from $50.0 million). The board also raised the 2008 capital budget from $64.7 million to $80.0 million. The amendment raised borrowing costs: Prime plus 1.5% for base rate loans, and LIBOR plus 3% with a 3% LIBOR floor. The press release ties the extra spending to customer demand for seabed (transition zone and OBC) recording capacity and expansion in other international markets.

material agreement

On June 14, 2007 Geokinetics redeemed all of the $110.0 million floating rate notes issued in December 2006, paying $113.3 million including a $3.3 million (3%) premium plus accrued interest. This ends the indenture obligations. The filing does not say how the redemption was funded; the press release now lists the company on AMEX (GOK) rather than the OTC bulletin board.

material agreement termination

the American Stock Exchange certified GEOKINETICS INC's securities for listing, clearing them to begin trading.

listing compliance notice

On December 15, 2006 Geokinetics sold $110,000,000 of Second Priority Senior Secured Floating Rate Notes due 2012 (via RBC Capital Markets, guaranteed by its subsidiaries) and used the proceeds to repay the Junior Bridge Loan from the Grant deal. The $55,000,000 Senior Bridge Loan from Avista was instead settled by issuing 228,683 Series B preferred shares, so the preferred shares were issued earlier than the Oct 26 closing expected in September and in payment of the loan (principal plus interest) rather than for cash. PNC also replaced its facility with a $14,500,000 revolver and a $6,500,000 capital expenditure loan. The notes carry a commitment to register an exchange offer within 270 days of closing. This resolves the bridge loans but leaves $110 million of secured notes and a new class of preferred stock.

capital raising announcement

Details of the Grant Geophysical purchase: Geokinetics bought all Grant stock from Elliott Associates and Elliott International for $125,000,000 cash, with $5,000,000 held in escrow at Amegy Bank. It was funded by a $55,000,000 unsecured Senior Bridge Loan from Avista and a $100,000,000 unsecured Junior Bridge Loan (borrower: Geokinetics Holdings) from Avista and Royal Bank of Canada, both due Sept 8, 2007. About $12,000,000 of the PNC debt was repaid, and PNC's agreement was amended (Grant added, covenants changed, maturity moved to the earlier of Sept 8, 2007 or refinancing of the Senior Bridge Loan). Geokinetics also agreed to sell 220,000 Series B Senior Convertible Preferred shares to Avista entities and Levant America for $55,000,000 at a closing expected Oct 26, 2006, to repay the Senior Bridge Loan; this creates new preferred stock ahead of common, which is a dilution risk (inference). Scott McCurdy, Grant's CFO, became Geokinetics CFO on a three-year contract at $200,000 base salary plus 175,000 restricted shares.

asset acquisition disposition

The board approved a new pay plan for directors: each gets restricted shares worth $50,000 (priced at the Sept 6, 2006 close), vesting over three years, plus cash fees of $15,000 a year, extra fees for the Chairman ($15,000), Audit chair ($7,500) and Compensation chair ($5,000), $1,000 per board meeting and $250 per committee meeting, effective back to May 17, 2006. The attached press release announces that Geokinetics completed the purchase of Grant Geophysical on September 8, 2006 for $125 million cash (subject to adjustments), financed by Avista Capital Holdings and Royal Bank of Canada, with part used to repay existing Geokinetics and Grant debt. The release says this lifts nominal crew count to 20 from three a year ago and names Scott McCurdy as incoming CFO.

material agreement

On July 25, 2006 (effective July 28) subsidiary Quantum Geophysical signed a three-year capital lease with CIT Group/Equipment Financing: 36 monthly payments of $190,017.46, totalling $6,840,628.56, with a purchase option at the end. Geokinetics and its principal subsidiaries guarantee it. The press release says it funds about 5,000 more channels of seismic equipment and a new 3D crew, taking the company to roughly 37,000 channels owned. This adds to the company's debt-like obligations alongside the new PNC facility.

debt financing

On June 12, 2006 Geokinetics and four subsidiaries closed a new $24,000,000 credit facility with PNC Bank: a $12,000,000 term loan and a $12,000,000 revolving line. The term loan proceeds were used mainly to pay off all obligations to HSBC Bank Canada, the lender inherited with Trace, so the HSBC credit agreement is replaced. The CEO called it a step in integrating Trace.

debt financing

On December 9, 2005 Geokinetics completed the second and final closing of its private placement, selling 4,550,000 common shares at $1.25 for $5,687,500, plus five-year warrants for 455,000 shares at $2.00. Total proceeds from both closings were $30,837,500. This portion is for general corporate purposes and working capital, since the first closing went to Trace and the equipment payoff. Placement agent RBC Capital Markets received warrants for 274,050 shares. Shareholders are diluted further.

capital raising announcement

The Trace Energy Services acquisition announced in August closed on December 1, 2005, funded by a private placement of common stock for $25,150,000 with five-year warrants for 2,012,000 shares at $2.00. (The filing gives two different share counts for the placement, 20,120,000 and 25,150,000.) Geokinetics also paid GeoLease Partners $2,582,558.58 to end its equipment lease. Trace brings a CDN $17,638,652 credit agreement with HSBC Bank Canada, guaranteed by Geokinetics and its principal subsidiaries. CDN $2,000,000 and the 1,000,000 shares issued to the sellers are held in escrow. All 8,333 Series A preferred shares, issued a year earlier, were converted into 8,832,980 common shares, so the preferred is gone and common shareholders are diluted.

asset acquisition disposition

Geokinetics agreed on July 29, 2005 to buy all of Calgary-based Trace Energy Services for CDN $35,000,000 in cash (subject to adjustments) plus 1,000,000 Geokinetics shares. The sellers are SCF-III, L.P. and James White. Closing depends on Geokinetics obtaining satisfactory financing and is expected in the fourth quarter of 2005. The filing's Item 8.01 says the deal was consummated, but the press release attached to it says only that an agreement was signed and closing is still to come.

material agreement

Geokinetics raised $2,499,900 by selling 8,333 shares of 6% Series A convertible preferred stock to private investors, including directors Steven Webster and William Ziegler. The preferred stock converts into common at $0.30 per share and ranks ahead of common shareholders on liquidation. About $1.5M is earmarked for software and equipment for subsidiary Geophysical Development Corporation and about $1.0M for working capital and fees. Dividends and buybacks on other stock now need approval from 51% of the preferred holders. (Inference: this is probably what the directors' early-December share purchases reported just before were, though the filing does not link them.)

capital raising announcement