Each one in plain English, with the numbers worked through for a shareholder.
18 Feb 2016capital raising announcement● NeutralMajor
On Feb 17, 2016 PetroQuest completed its exchange offer for the 10% 2017 notes: holders of $214.379 million (about 61% of the notes) tendered, and received about $53.6 million cash, $144.674 million of new 10% Second Lien Senior Secured Notes due Feb 15, 2021 and 4,287,580 new common shares. The offer had been for up to $300 million, so the result fell short of the maximum; the filing says the new notes are secured by second-priority liens behind the bank facility. Note the filing states the 2021 notes' principal as $214.379 million, while the issued amount is $144.674 million (the filing's own wording). This completes the exchange thread launched in January and dilutes existing shareholders with the new shares.
On February 1, 2016 PetroQuest signed a Fourth Supplemental Indenture removing most restrictive covenants and some default provisions on the 10% 2017 notes after enough holders consented; it only takes effect when the exchange offer completes. The exchange offer is for up to $300 million of those notes in return for up to $75 million cash, $202.5 million of new 10% Second Lien Senior Secured Notes due 2021 and 6,000,000 common shares; a Feb 3 press release gave early-tender results, but the figures are not in the text provided. U.S. Bank replaced Bank of New York Mellon as trustee. This is the first sign of the 2017 notes refinancing that the credit amendments anticipated.
On January 25, 2016 PetroQuest signed a Thirteenth Amendment to its bank credit agreement, cutting the borrowing base and commitments from $55 million to $42 million, with usage expected to be limited to about $10.5 million (25% of commitments) in the first quarter. It loosens the debt to EBITDAX limits (5.0x for March 2016, up to 5.75x later), replaces the current ratio test with a minimum EBITDAX to cash interest of 1.0x, allows up to $300 million of second-lien debt for the previously announced exchange of the 2017 notes, and permits a cash sale of most remaining Oklahoma assets by March 31, 2016 (borrowing base falls $10 million on that sale). It also bars preferred dividends on the 6.875% Series B preferred stock and removes the stock buyback allowance. No borrowings were outstanding at January 25, 2016.
On December 28, 2015 the NYSE sent a second notice: PetroQuest's average market value fell below $50 million over 30 trading days while its stockholders' equity was also under $50 million. The company has 45 days to submit a business plan to regain compliance within 18 months, and the stock keeps trading in the meantime. This adds to the share-price notice of December 8.
On December 8, 2015 the NYSE told PetroQuest it fell short of the continued listing rule because the average share price was below $1.00 for over 30 consecutive trading days. The company has six months to get back above $1.00 (closing price and 30-day average) to avoid delisting, and the stock stays listed meanwhile. This is a new listing issue, separate from the clerical NYSE letter of 2013.
On September 8, 2015 PetroQuest signed a Twelfth Amendment to its bank credit agreement: the borrowing base and lender commitments were each cut from $70 million to $55 million, and the debt to EBITDAX limits were reset (4.0x for Sept 30, 2015, then 4.5x or 5.75x depending on unused availability, 5.0x from March 2017). It allows the company to redeem the 2017 notes with cash by June 30, 2016 if at least 25% availability remains, and requires a first-priority lien on at least 90% of oil and gas property value. No borrowings were outstanding at August 31, 2015.
5 June 2015asset acquisition disposition● NeutralMajor
On June 4, 2015 PetroQuest sold most of its Woodford Shale and Mississippian Lime assets to WSGP Gas Producing, LLC for gross proceeds of about $280 million (before post-closing adjustments, effective Jan 1, 2015); about $14 million of that is deferred and tied to wells PetroQuest operates for WSGP. WSGP is the same buyer of the 2010 Woodford half-stake sale. In the same filing, the Eleventh Amendment to the bank credit agreement cut the borrowing base from $190 million to $70 million (commitments from $170 million to $70 million, settling the interim review due by July 1), released liens on Oklahoma assets, allowed up to $350 million of second-lien debt (no more than $50 million for purposes other than redeeming the 2017 notes), extended maturity to June 4, 2020 (or Feb 19, 2017 if 2017 notes remain unrefinanced), and replaced the covenants with a max total debt/EBITDAX of 4.0x and a 1.0x current ratio. This resolves the earlier open Woodford/WSGP thread in part (deferred payments now set out) and the interim redetermination thread.
On March 27, 2015 PetroQuest signed a Tenth Amendment: the borrowing base was cut from $220 million to $190 million (commitments unchanged at $170 million) and the minimum current assets to current liabilities ratio was lowered to 0.75x for the March and June 2015 quarters, then 1.0x. The company had $85 million drawn as of March 30, says it is in compliance, and has requested an interim redetermination by July 1, 2015 so its Thunder Bayou discovery well, expected to start production in early May 2015 at about 38,000 Mcfe/d, can be counted.
On February 26, 2015 PetroQuest signed a Ninth Amendment to its bank credit agreement, replacing the 3.5x total debt to EBITDAX limit with a 2.25x limit on senior secured debt only, and adding a minimum EBITDAX to cash interest ratio of 2.0x from the March 31, 2015 quarter. The CEO's comment links the change to flexibility in 'the current pricing environment' and the filing's risk language cites depressed oil prices since the end of 2014.
SPO Partners II, L.P, SPO Advisory Partners, L.P, San Francisco Partners, L.P, SF Advisory Partners, L.P, SPO Advisory Corp, John H. Scully, Edward H. McDermott, Eli J. Weinberg reported no remaining PETROQUEST ENERGY INC shareholding in its periodic institutional filing.
On September 29, 2014 PetroQuest signed an Eighth Amendment raising the borrowing base from $200 million to $220 million and lender commitments from $150 million to $170 million, as the scheduled autumn review. A press release also says the Eagle Ford assets were sold in September 2014 for net proceeds of about $9.7 million; this closes the open Eagle Ford sale thread (the buyer is not named in the text).
On March 31, 2014 PetroQuest signed a Seventh Amendment to its bank credit agreement: lenders changed the rule on hedging (swap) agreements, kept the borrowing base at $200 million, and added Bank of America and The Bank of Nova Scotia as new lenders. This continues the series of amendments, and the lender group is now six banks.
SPO Partners II, L.P, SPO Advisory Partners, L.P, San Francisco Partners, L.P, SF Advisory Partners, L.P, SPO Advisory Corp, John H. Scully, Edward H. McDermott, Eli J. Weinberg reported a PETROQUEST ENERGY INC shareholding of 6,443,384 shares (10.00% of votes) in a periodic institutional filing.
