TXCO Resources Inc

TXCO Resources Inc deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

The plan took effect on February 11, 2010 and the Newfield/Anadarko asset sale closed that day for about $307.4 million in cash. All of the company's equity, including every common share, was cancelled; the company is renamed Reorganized TXCO, Inc., one new share went to the liquidating trust, and the old board and officers resigned in favour of Albert S. Conly of FTI Consulting. Common holders may still receive something from the liquidating trust, but capped at $10,000,000 in total and only after preferred holders get $7,575,000, with no assurance of any payment (record date February 11, 2010). Trading has stopped and a Form 15 to end reporting is planned. This completes the plan and sale threads from the January confirmation.

bankruptcy or receivership

On January 27, 2010 the bankruptcy court confirmed the Second Amended Plan, under which substantially all assets go to Newfield and Anadarko and most of the rest goes to a liquidating trust; the effective date is expected around February 11, 2010. DIP, bank, secured, priority and general unsecured claims are to be paid in full; preferred holders (Class 11B) are to be paid $7,575,000 and common holders (Class 12) a pro rata share of $10 million as funds become available, with Newfield's redeemed-preferred interest paid only after both. All existing equity, including 38,315,955 common shares, will be cancelled on the effective date, with trading to cease and a Form 15 to follow. This resolves the plan and sale threads, though the filing gives no assurance that equity holders will actually receive anything.

bankruptcy or receivership

On January 11, 2010 TXCO signed a joint agreement with both Newfield and Anadarko to sell the same assets, for the lesser of $310 million cash or the amount needed to repay lenders and pay all other creditors in full; the board called it superior to both earlier deals, and closing could come as early as January 29, 2010. Newfield agreed to subordinate its redeemed-preferred claims, including up to $10 million, to common shareholders' distributions. This reverses the company's earlier line: it now says preferred and common holders may receive some cash, with common limited to $10 million in total, though all equity is still expected to be cancelled and no payment is assured.

material agreement

On December 31, 2009 TXCO signed a deal to sell the same assets covered by the November Newfield agreement to Anadarko E&P Company LP, for the lesser of $310 million in cash or $1 million more than enough to repay lenders (including the DIP loan), pay all other creditors in full and cover contract cure amounts. The board judged it a superior proposal to Newfield's $223 million deal, which would be terminated if the court approves the Anadarko deal; closing is expected before February 28, 2010. The company still says shareholders are not expected to receive any cash or property and the equity will likely be cancelled.

material agreement

On November 6, 2009 TXCO agreed to sell a substantial portion of its assets to Newfield Exploration Company for $223 million in cash, subject to price adjustments for title and environmental defects, with closing expected before February 28, 2010 and economic effect from January 1, 2010. Excluded assets include the drilling rigs, offshore and Oklahoma properties, non-operated Williston Basin interests, some non-operated south Texas interests, and the Dexter Waterflood Unit, Forrest WM B1U and Vinton Dome interests. It needs final bankruptcy court approval; alternative bids are allowed until January 6, 2010, and a break-up fee of 3% of price plus up to $500,000 expenses may apply if a better deal closes. The company says it does not expect shareholders to receive any cash or property and that the equity will likely be cancelled under the plan.

material agreement

TXCO Resources Inc's exchange filed to remove a class of its securities from listing.

listing compliance notice

On June 15, 2009 the bankruptcy court gave final approval to the full DIP Credit Agreement, a multiple-draw term loan of up to $32 million (including the $12.5 million interim amount) with BD Funding I, LLC as agent. Interest is LIBOR (3% floor) plus 4% on the first $7.5 million and plus 10% above that; fees are 1% at first advance and 2% at repayment, and it matures at the earliest of December 15, 2009 or a confirmed plan taking effect. The loans carry first-priority priming liens on all debtors' assets, ahead of earlier liens. This resolves the open DIP approval thread; the company says it lets operations continue and preserves leases.

material agreement

On May 22, 2009 TXCO and its subsidiaries signed the interim DIP Note with Double Black Diamond Offshore, Ltd. as agent for lenders including Regiment Capital Special Situations Fund III, CIT Bank, BD Funding I and LTD/DLT Longhorn Corp., for up to $12.5 million. Interest is LIBOR (3% floor) plus 4% on the first $7.5 million and plus 10% above that, with a 3% origination fee; the loan has superpriority status and is secured by liens on all the debtors' assets, and matures in 30 days if no final order is entered, otherwise six months after the filing or on plan effectiveness. This is the interim step of the DIP financing previously flagged as pending.

material agreement

Nasdaq told TXCO on May 18, 2009 it will delist the common stock, with trading suspended at the open on May 28, 2009, citing the bankruptcy filing, concerns about the residual equity interest of existing shareholders, and ability to keep meeting listing rules. The company will not appeal and expects the stock to be quoted on the Pink Sheets, and is seeking an OTCBB listing. The court also gave interim approval to borrow up to $12.5 million of the proposed $32 million DIP loan, approved other first-day motions (wages, royalties, cash use), and entered an interim order requiring holders of at least 1,730,000 shares (about 4.50%) to give notice before buying or selling, aimed at preserving tax losses. This resolves the open question of interim DIP approval; final approval is still pending.

listing compliance notice

On May 17, 2009 TXCO and its subsidiaries (including Output Acquisition Corp.) filed for Chapter 11 in the Western District of Texas, and are running the business as debtors-in-possession. They are seeking court approval of debtor-in-possession financing of up to $32 million, with $12.5 million initially available, which is not assured. Enforcement of the Bank of Montreal debt is stayed by the filing. The company's press release attributes the filing to a liquidity squeeze, energy price volatility and a weak capital market. The filing also records a bylaw change making the Controller, Richard A. Sartor, the principal accounting officer. No plan or treatment of common shares is given yet.

bankruptcy or receivership

On April 21, 2009 Bank of Montreal accelerated the whole debt: about $50.0 million under the senior credit agreement and about $100.0 million under the term loan (as of March 31, 2009), roughly $150 million in total, and ended lenders' commitments to lend more. The company says it lacks the funds to repay, has not secured an extension or other financing, and that lenders could foreclose on substantially all its assets; it says a bankruptcy filing could leave its securities with little if any value. This follows the covenant breach and the preferred holders' redemption demands.

debt financing

On March 16, 2009 another Series D holder demanded redemption of 10,000 shares because of the same current ratio covenant breach. Payment is again suspended until the earlier of October 31, 2012 or payoff of the bank debt, with 1.5% monthly interest on unredeemed shares and the dividend at 12%; the price would be about $1,404 per share. This adds to the redemption demands from Capital Ventures International.

debt financing

On March 9, 2009 Capital Ventures International demanded redemption of 34,409 Series D and 15,000 Series E preferred shares, citing the company's previously disclosed breach of the current ratio covenant in its Bank of Montreal credit agreements. Payment of the redemption price is suspended until the earlier of October 31, 2012 or full satisfaction of the bank debt, but 1.5% monthly interest accrues on unredeemed shares and dividends rise to 12% while the breach continues. The redemption price would be about $1,404 per Series D share and $1,440 per Series E share if payable. This shows the 2007-08 preferred financings turning into a claim on the company.

debt financing

One buyer exercised its option and bought 13,909 more Series D preferred shares at $1,000 each (about $13.9 million), closing April 4, 2008, so only part of the optional $30 million was taken up. The company paid a net $927,280 for call spread transactions tied to these shares. It also filed a resale registration covering 19,296,805 common shares for the buyers, and the filing says paying common dividends or buying back common stock now needs consent of 80% of the Series D and Series E holders.

capital raising announcement

On February 28, 2008 the company agreed to sell $20 million of new Series E convertible preferred stock (20,000 shares at $1,000) and to swap the 55,000 Series C preferred shares from the November 2007 deal for Series D preferred shares, which keep the $14.48 conversion price and 6.5% dividend. Buyers may buy up to $30 million more Series D by March 20, 2008 (or May 20, 2008 at the company's option). Closing was expected by March 4, 2008. Proceeds are meant to help fund the 2008 drilling program, possibly repay some debt, and pay about $1.3 million net cost of call spread transactions. The new preferred ranks ahead of common stock and the buyers get a right of first refusal on 50% of certain later equity issues, which continues the Series C financing thread.

capital raising announcement

The company agreed on November 20, 2007 to sell $55 million of Series C Convertible Preferred Stock (55,000 shares at $1,000), with buyers able to take up to $25 million more. It converts to common at $14.48 per share, pays 6.5% dividends (12% on a Triggering Event), ranks ahead of common stock, and can be redeemed for cash on a change of control or Triggering Events. Proceeds are for the 2008 drilling program, possibly short-term debt repayment, and the roughly $3.67 million net cost of call spread transactions meant to limit dilution. Common stockholders must approve the issuance at a meeting by June 1, 2008; a resale registration with 1% penalties up to 10% also applies. Adds senior-ranking equity ahead of existing common holders.

capital raising announcement

The Output acquisition closed April 2, 2007: the company paid about $95.6 million, being $91.6 million cash and about 339,000 escrowed shares, and ended all hedges assumed with a $4.8 million payment. It was funded by two new Bank of Montreal facilities replacing the Guaranty Bank credit agreement: a four-year senior revolver with $125 million commitments, $60 million initial borrowing base and $41.8 million drawn, and a five-year second-lien term loan of $80 million fully drawn. Both carry leverage and coverage covenants. This resolves the February merger thread and sharply raises the company's debt.

asset acquisition disposition

On February 20, 2007 the company agreed to buy Output Exploration, LLC (Anadarko in Oklahoma, Gulf Coast in Texas and Louisiana) by merger, for about $91.6 million cash plus $4.0 million of TXCO shares held in escrow for one year against indemnity claims. Output's California assets are to be spun off first and not acquired. A $2.0 million deposit is in escrow, and closing is expected by April 2, 2007. The company has debt financing commitments for a new four-year senior secured revolver and a five-year second-lien term loan to pay the cash and repay certain debt. This is the first acquisition outside the Maverick and Marfa Basin acreage in this history.

business combination

The company sold 3.0 million new common shares to institutional investors in a private placement at $10.50 per share, $31.5 million total, closing April 4, 2006, with A.G. Edwards and Harris Nesbitt as placement agents. Net proceeds of about $29.9 million are for Maverick Basin drilling, Marfa Basin drilling and a recent drilling rig purchase. This adds shares, bringing the count to about 32.9 million per the press release, and the company must file a resale registration within 30 days or pay penalties of 1% a month up to 10%.

capital raising announcement

The company reports that an October 4, 2005 participation agreement with Peacock Oil & Gas Properties and Elton Smith closed October 21, 2005. It acquired working interests in about 135,000 gross acres (about 128,000 net) in Presidio and Brewster Counties, Texas, paying cash plus 450,000 unregistered common shares. The cash amount is not stated in the filing.

capital raising announcement

The company reports that the $80 million Maverick Basin sale to EnCana closed on September 30, 2005; the earlier filing had listed it under the wrong item. Separately, Nasdaq notified the company on October 12, 2005 that director Thomas Gose's resignation left its audit committee out of compliance with the independence rule. The board named Stephen M. Gose, Jr. to the audit committee, which the company says restores compliance.

asset acquisition disposition

The company agreed to sell selected Maverick Basin interests to EnCana Oil & Gas (USA) Inc. for US$80 million, effective Sept. 1, 2005 and subject to due diligence and other conditions. The buyer gets about 3% of estimated proved reserves and about 20% of current production; the company keeps about 670,000 gross acres and expects to use proceeds to repay bank debt and redeemable preferred stock in full. The filing also says the strategic alternatives review begun in December 2004 has concluded, ending that thread with an asset sale.

material agreement

The company agreed to an asset swap with Arrow River Energy LP and CMR Energy LP. It gets a 50% working interest in 174,460 gross acres (68,545 net) in Maverick, Dimmit and Zavala counties, Texas, plus 3-D seismic data, and will operate. In return, Arrow River and CMR get a 50% interest in 106,500 acres of tracts within the company's existing block. Arrow River keeps a net-profits interest on new wells, payable until it has received $6,250,000 plus interest.

asset acquisition disposition

The company offered employees amended change-in-control agreements dated December 15, 2004 with enhanced payout guarantees, replacing the November 11, 2003 agreements once accepted. It also announced a 2005 capital spending plan and hired Raymond James & Associates to pursue strategic alternatives to enhance shareholder value.

material agreement termination