TRANSMERIDIAN EXPLORATION INC

On March 20, 2009 the company and two subsidiaries, Transmeridian Exploration Inc. (the issuer of the senior notes) and Bramex Management, Inc., filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas. They will keep operating as debtors-in-possession. The filing gives no plan terms, so what happens to common and preferred shares is not yet stated.

bankruptcy or receivership

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

listing compliance notice

On November 17, 2008 the exchange (now NYSE Alternext US) staff gave the company a delisting notice, saying it failed to show it could regain compliance with the listing standards raised since May and September. The exchange said the UEGL agreement, now terminated, was the company's sole initiative to regain compliance, and projections showed it would not reach the $6M equity requirement by March 23, 2010. It also cited an unpaid $15,000 listing fee and wanted a reverse stock split, which the company will not do. The company does not plan to appeal, expects the decision final by November 24, 2008, and warns a trading market may not resume after delisting.

listing compliance notice

On November 15, 2008 the company and United Energy Group agreed to end the Investment Agreement and Investor Rights Agreement, and each released the other from claims relating to them. The note exchange offer and UEGL's $76-per-share preferred tender offer were also terminated; tendered notes and preferred shares are to be returned, and no preferred was purchased. The October indenture amendments will not take effect. This ends the UEGL rescue deal that had been the main pending transaction. The filing gives no reason for the termination.

material agreement termination

On October 24, 2008 the company and its subsidiaries signed a Third Supplemental Indenture and new security documents for the $290M 12% senior secured notes, after noteholders gave the required consents on October 8. The changes only take effect when the notes are accepted in the exchange offer, expected just before the UEGL deal closes. Under that exchange, holders would get $200 cash and $800 of new 12% notes due December 15, 2010 per $1,000 of old notes, and the filing says tenders already exceed the $222,157,000 threshold (90% of notes excluding the $43,159,000 held by UEGL). This continues the UEGL deal, which is not yet closed; the filing text is truncated.

security holder rights change

On September 23, 2008 the AMEX said the company also fails three stockholders' equity standards (equity below $2M, $4M and $6M thresholds combined with past losses), based on its June 30, 2008 quarterly report. This adds to the May notice; the AMEX had accepted the company's earlier plan and extended that deadline to October 31, 2008. The company will submit a revised plan by October 7 to cover the new standards by March 23, 2010, and it refers to an Amended and Restated Investment Agreement with United Energy Group dated September 22, 2008. If the plan is rejected or compliance is not reached, delisting proceedings may follow.

listing compliance notice

On June 18, 2008 the trustee for the $290M 12% senior secured notes sent a notice of default saying the company had not delivered a required legal opinion and accountants' compliance statement, and had not paid the June 15 interest. The company paid $8.7M on June 27, curing the interest default within the grace period. The other two defaults become an event of default if not cured by August 17, 2008, which would let the trustee or 25% of holders demand immediate repayment of the notes; the company says it intends to cure them.

debt financing

On June 11, 2008 the company signed an Investment Agreement with United Energy Group Limited (Bermuda), after the failed $3.00 buyout. UEGL agreed to buy at least 90% of the senior and junior preferred stock at $76 per share (cash, or other forms for some holders), to put in cash for capital spending and working capital, and to receive new B-1 and B-2 preferred stock plus 10-year warrants on 33,653,960 shares at $2.00 and 5,000,000 at $1.00. The deal needs a preferred tender offer, a 90% exchange of the $290M 12% senior notes, a shareholder vote to raise authorised common shares to 500,000,000, and regulatory approvals. The company would then redeem remaining preferred, and make a change-of-control offer for notes not exchanged. This is the capital investment discussed after the merger ended; it is conditional and not closed. The warrants and convertible preferred could dilute common holders (inference); the filing text given is truncated, so the terms of the new preferred are not fully shown.

material agreement

On May 23, 2008 the American Stock Exchange told the company it fails a continued listing standard because its losses or financial condition are so impaired that the AMEX questions whether it can continue operations and meet its debts as they fall due. The company must submit a plan by June 5, 2008 to regain compliance by August 20, 2008, or face delisting proceedings. It also disclosed that its 2007 annual report carried an auditor's going-concern qualification (UHY LLP), which it had not announced by press release as required. Its ticker now carries a .BC marker for non-compliance.

listing compliance notice

On March 31, 2008 the company terminated its merger agreement with Trans Meridian International, the buyer formed by CEO Olivier, because the buyer had not met the financing condition and the board was not satisfied with the financing information provided by March 21. No termination fee or other liability is owed by the company. The $3.00-per-share cash offer is therefore off. The company says it will keep seeking proposals from other parties and any new deal could pay common holders less than $3.00. It is also in preliminary talks about a substantial capital investment; no agreement on either is reported. The filing says the termination may lower the junior preferred conversion price from $1.90 to the 15-day average share price, but not below $1.50, which would mean more common shares on conversion (up to 66.67 shares per junior preferred share).

material agreement termination

The board set deadlines for the Olivier-led buyer: detailed financing information is due by March 21, 2008, and if the board is not satisfied with it, or the financing condition is not met by March 31, 2008, the company will terminate the merger agreement. It says it is continuing discussions with another interested party about acquiring the company, and warns that a deal with someone else could pay common holders less than the $3.00 per share. It is also in preliminary talks about a substantial capital investment. No agreement is reported on either; the financing condition remained unmet as of this filing.

business combination

The company formally reported the Feb 1, 2008 waiver letter extending the buyer's deadline. The financing condition requires definitive documents making at least $1,000,000,000 available to the buyer and Merger Sub. The company may terminate the merger agreement without liability at any time after Feb 15, 2008 if that condition is not met. This puts a figure on the financing needed for the going-private deal.

material agreement

The company announced it has given the buyer, Trans Meridian International (formed by CEO Olivier), more time to meet the financing condition. The company can now terminate the merger agreement without liability at any time after Feb 15, 2008 if financing is not in place, earlier than the Feb 29 date the buyer had. It says it remains in contact with other interested parties and may still solicit competing offers. The $3.00 tender offer has still not started.

business combination

The company filed the merger agreement signed December 31, 2007 with Trans Meridian International, Inc. and its subsidiary TME Merger Sub. Merger Sub will make a tender offer at $3.00 per share, then merge into the company, which would become a wholly owned subsidiary of the parent, with each remaining common share converted into $3.00 in cash. This formalises the December 31 announcement; it does not report that the tender offer has started or that the deal has closed.

business combination

The company announced a definitive merger agreement with Trans Meridian International, Inc., a company formed by its own Chairman and CEO Lorrie Olivier. It plans a cash tender offer of $3.00 per common share (114% above the $1.40 close on December 28, 2007), followed by a merger, as a going-private deal that would delist the stock from AMEX and deregister it. The offer has not begun and cannot begin until financing is in place; closing needs enough shares tendered that, with Olivier's group's holdings, they make up a majority on a fully diluted basis. The company may seek competing offers until the financing condition is met, and either side can walk away if financing is not in place after January 31 (company) or February 29, 2008 (buyer). This is the outcome of the sale process begun in 2007, but it is still conditional, and the buyer is led by the CEO.

business combination

The company paid a $4.50-per-share dividend on the 15% senior preferred on October 1, 2007, entirely in kind: 19,029 more preferred shares plus 1,039 common shares in place of fractions. It also confirms that the July 1 test was missed (neither the production nor the share-price threshold was met), so the dividend rate rose to 18% a year; this resolves the open question from the earlier filings. Separately, an October 3 press release says South Alibek oil production has resumed at about pre-curtailment levels through the new central facility, with approvals for the amended gas utilization plan received, gas flaring permitted until November 1, 2007, and the 2007 flaring allowance raised from 7 million to 20 million cubic meters. It says the company's own pipeline connection to the export system can now be used, with first export shipments still ahead. This resolves the curtailment and flaring-relief threads.

dividend declaration

The $33.0M of junior preferred proceeds held in escrow since June 26 was released on July 25, 2007, after the company received the stockholder approvals needed for issuing common shares at or above 20% of those outstanding; the company says it expects about $31.2M net for working capital and general corporate purposes, including development costs. This completes the $55.0M junior preferred financing. A July 27 correction fixed errors in the rollover terms of the junior preferred. Two July 27 press releases are attached: one says Transmeridian has received no official notice of a licence violation at the Gasha field in Dagestan (50% interest, about $3.5M invested, not producing, no reserves booked, no significant work planned for the rest of 2007); the other gives a sales-process update, saying management presentations to potential buyers were scheduled to start the following week in Europe (the text is cut off after that).

capital raising announcement

The company paid its second dividend on the 15% senior preferred, $3.75 per share, on July 2, 2007, entirely in kind: 17,307 more preferred shares plus 816 common shares in place of fractions, and extended its resale registration to cover them. Separately, a June 29 press release says it will commission the permanent central production facility at South Alibek (initial design capacity about 10,000 bopd) and curtail production there for an estimated two weeks, partly while awaiting government relief on gas flaring limits. The company says it expects the relief but there is no assurance, and if not granted it may keep curtailing or face fines that could be substantial. This continues the in-kind dividends and interrupts the South Alibek production recovery thread.

dividend declaration

The junior preferred placement grew to $55.0M (550,000 shares) when a purchase agreement was signed June 26, 2007, replacing the earlier $40M commitment. 100,000 shares were issued June 18, 120,000 more on June 26, and 330,000 shares plus $33.0M of proceeds went into escrow with The Bank of New York, to be released on a shareholder vote approving common issuance above 19.99%, within 60 days, or on a 66-2/3% holder election. The current conversion price is $2.25, and the company agreed to further cash returns (25% and 10% of commitments, 25% of the new purchases), deferred until a change of control or June 18, 2008 and growing at 10% a year if no change of control by December 31, 2007. This enlarges the June 22 financing, with a heavier cost for common shareholders.

capital raising announcement

This filing details the $40.0M private placement of 20% junior preferred stock completed June 18, 2007. 100,000 shares were sold at the initial closing (net of about $650,000 of expenses); the remaining 300,000 depend on conditions, with 200,000 shares and about two-thirds of that tranche's proceeds escrowed pending a shareholder vote. The preferred ranks behind the 15% senior preferred but ahead of common, pays 20% dividends (in kind, in common stock or cash), converts at the lower of $2.48 or a June 2007 average price, and the conversion price can fall to as low as $1.90 by October 2007 and $1.65 by December 2007 if no change of control or definitive agreement occurs. Existing common holders face substantial dilution. This is the full terms of the commitment announced June 18.

capital raising announcement

On June 18, 2007 investors committed to buy 400,000 shares of a new 20% junior preferred stock at $100 each ($40M). 100,000 shares were sold immediately; the other 300,000 can be drawn from June 25 if conditions are met, including a shareholder vote on issuing common shares above 19.99% of those outstanding, with 200,000 of them held in escrow for up to 60 days. Holders get the right to reshape the board, and fees of 10% and 25% of commitments are owed, deferred until a change of control or June 18, 2008. The filing also says SEC staff have questioned the 2006 10-K and a March 2007 S-3 (reserve figures, a 2006 downward reserve revision, production forecasts), warns this could lead to reserve writedowns, and says the company will file amended versions. A press release says the company is continuing its plan to seek proposals to acquire the company or the South Alibek Field. This is a new, junior layer of financing behind the December 2006 15% preferred, and the acquisition effort is a continuing process.

material agreement

Between April 26 and 30, 2007 the company sold 1,655,000 common shares at $2.70 each in a private placement, for about $4.5 million gross. The purchasers received registration rights and listing on the American Stock Exchange has been applied for. The price is below the $5.50 paid in May 2006, and the new shares dilute existing holders.

capital raising announcement

On December 1, 2006 the company completed the preferred stock raise: $37.0 million sold to an initial purchaser and $7.0 million to investors including the CEO and CFO, for about $41.2 million net. The new 15% preferred ranks ahead of common and the earlier Series A preferred, converts at $4.50 per share, and can be redeemed by holders on December 1, 2011 or on a change of control. The conversion price drops to $3.90 and the dividend rises 3 points unless a production or share-price target is met by mid-2007. Existing shareholders face potential dilution from conversion and in-kind dividends, and covenants restrict debt and payments. This completes the offering announced November 24.

capital raising announcement

The company announced it had started a private offering of $35 million of senior redeemable convertible preferred stock, plus a concurrent $7 million placement to investors including its CEO, CFO and two existing stockholders. The $7 million has already been received. Proceeds are intended for the accelerated development of the South Alibek Field, working capital and general purposes. Final terms were to be set at pricing. This is more funding on top of the 2005 and May 2006 note sales.

capital raising announcement

On May 26, 2006 the company sold a further $40 million of Senior Secured Notes due 2010 at 97% of face value, on the same terms as the $250 million issued in December 2005, and 1,818,182 common shares at $5.50 (about $10 million) to institutional investors. $3.6 million of proceeds is escrowed for interest on the new notes. Noteholders consented to amendments allowing the new notes and allowing up to $1 million of accrued dividends on the Series A preferred to be paid. The new shares add to the share count, and the company must register them for resale and issue extra shares if registration is late.

capital raising announcement

On February 13, 2006 the American Stock Exchange sent a warning letter because the company issued the one million Kornerstone shares in December 2005 without first getting AMEX approval; the stock carries a '.BC' noncompliance marker until this is fixed. The company has applied for listing of the shares and AMEX is not starting continued-listing proceedings at this time. The same filing's press release reports that four of seven producing South Alibek wells were shut in during extreme cold, with output about 1,200 bopd since late 2005 and expected at 2,500-3,000 bopd once work is finished; drilling of SA-11 and SA-12 began, and two more rigs are planned in the first half of 2006. It also says the Rig 232 lawsuit was fully settled, with about $1.8 million paid to the first lienholder plus $120,000 in legal fees. The shares trade on AMEX as TMY.

listing compliance notice

On January 9, 2006 a wholly owned subsidiary completed the purchase of Kornerstone Investment Group's 10% carried working interest in the South Alibek Field for $19 million: $15.25 million in cash plus one million company shares valued at $3.75 each. This completes the Kornerstone deal agreed in December 2005 and adds one million shares to the share count.

asset acquisition disposition

On December 12, 2005 the company's subsidiary Transmeridian Exploration Inc. (BVI) sold $250 million of 12% Senior Secured Notes due December 15, 2010, bundled with warrants for about 17.3 million company shares at $4.31, to institutional and accredited investors; $30 million of proceeds is escrowed for the first four quarterly interest payments. The notes are guaranteed by the parent and subsidiaries and secured by share pledges, with Bramex and Caspi Neft due to join as guarantors by January 3, 2006 or the notes must be redeemed at par and the warrants cancelled. The company also entered a December 13 purchase agreement with Kornerstone for its carried working interest in South Alibek (the text is cut off before the terms). This is the large new debt that follows the $22.5M short-term notes of August 2005; the filing does not say how the proceeds will be used, so whether it repays those notes or the Kazakh bank loans is not stated here. The warrants add potential dilution.

asset acquisition disposition

The company's 50%-owned subsidiary Caspi Neft TME was told by its Kazakh bank that due dates under its main credit facility are extended to the regular payment dates on or after October 18, 2005. About $8.0 million of principal and interest due through August 31, 2005 had not been paid, and about $2.7 million more was due in September. The company says it has received a proposal to refinance all the bank debt and expects to complete it by mid-October 2005. This follows the February 2005 deferral to July 15, and the payments had still gone unpaid.

material agreement

On August 30, 2005 the company issued $22,500,000 of 10% convertible notes, with warrants for 4,500,000 common shares at $2.40. The notes mature December 15, 2005 or at the closing of an equity financing, whichever is earlier. Proceeds are for general purposes, including repaying past-due and current amounts under the credit facilities of the company and its subsidiaries. This adds new debt and potential dilution.

capital raising announcement

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

listing compliance notice

The company's 50%-owned subsidiary OJSC Caspi Neft got its lender to push all principal and interest payments due between February and mid-July 2005 back to July 15, 2005. About $14.4 million of scheduled payments will fall due then. Transmeridian agreed to advance up to $10.0 million to Caspi Neft for its first-half 2005 capital needs. This is a deferral, not a reduction of debt.

material agreement

On November 12, 2004 the company raised $25,000,000 in cash by selling 1,785.714 shares of Series A convertible preferred stock at $14,000 each, with warrants for up to 4,464,286 common shares at $1.55. The preferred converts at $1.40 per common share and pays a 4.5% annual cash dividend. Proceeds are for general purposes, including development drilling in the South Alibek Field in Kazakhstan. Conversion and the warrants could dilute common shareholders, and the preferred ranks ahead of common on liquidation.

capital raising announcement

Transmeridian agreed with Emba Trans Ltd. to buy a 25% interest in the Emba Trans crude oil rail terminal in exchange for 4,000,000 restricted common shares, plus an exclusive option to buy another 25% within 180 days. The terminal is about 40 miles by road from the South Alibek field and is expected to start receiving crude from it in late August 2002, first by tank truck. The company also moved its headquarters to new 6,500 sq ft offices at 397 N. Sam Houston Pkwy. E., Houston. Issuing 4,000,000 shares for the stake adds to the shares outstanding.

asset acquisition disposition