ZaZa Energy Corp

ZaZa Energy Corp's exchange filed to remove a class of its securities from listing.

listing compliance notice

ZaZa withdrew its appeal on September 30, 2015 and chose to delist from Nasdaq; trading was suspended at the open on October 5, 2015. The shares may be eligible to be quoted on the OTC Bulletin Board. This ends the Nasdaq compliance saga that began with the February 2015 notice.

listing compliance notice

On September 16-17, 2015 the three founder-directors (including CEO Brooks) exchanged all their 8% subordinated notes (about $50.1 million with interest) for a 2.4% overriding royalty (0.8% each) in any future interests the company or its affiliates acquire over the next five years. This extinguishes that debt without issuing shares, replacing the earlier plan to convert the notes into stock. Management says total debt falls from about $105 million to about $55 million; that figure is the company's statement. The senior secured and convertible notes remain in default.

material agreement

ZaZa did not pay the August 1 interest on its 9% convertible notes by the August 31, 2015 end of the grace period, so the whole debt ($42.1 million including accrued interest) became immediately due; default interest runs at 2.0% above 9%. This is also a default under the senior secured notes, which separately missed an August 21 interest payment. No holder had yet sent notice of acceleration, and ZaZa says it is still working with both sets of holders with no assurance of a resolution.

debt financing

Nasdaq told ZaZa on August 26, 2015 that its stock will be delisted because the company did not regain the $35 million market-value requirement within the 180-day grace period. ZaZa said it intends to appeal to a hearings panel; otherwise trading would be suspended September 4, 2015. If the appeal fails, the shares may be quoted on the OTC Bulletin Board or Pink Sheets. This follows the February deficiency notice and the deadline noted earlier.

listing compliance notice

On August 19, 2015 ZaZa issued a further $76,727.10 senior secured note to Alpha Capital, plus 50,000 common shares at $0.50 ($25,000 gross). Alpha also bought the O-Cap funds' remaining senior notes, so all the lenders who refused to extend are gone. ZaZa also missed the August 1 interest payment on the convertible notes (30-day grace period running), and says it will re-engage the remaining holders to seek an extension, with no assurance of success. The senior notes remain in default at 13.00%.

capital raising announcement

ZaZa missed the July 15, 2015 repayment of the ~$13.9 million senior secured notes, so the notes are in default and their interest rate rose to 13.00% from July 16. On August 5, 2015 it issued $340,000 of new senior notes (to an affiliate of director John Hearn and to CEO Todd Brooks, per the filing's text), who also bought the existing notes held by Talara and Blackwell. Talara, Blackwell and the two O-Cap funds, who held about 5.90% of the notes, had declined to extend. The default also cross-defaults the $40M convertible notes, and any holder could accelerate, though no acceleration notice had been received. This turns the earlier string of extensions into an open default.

debt financing

Nasdaq told ZaZa on August 3, 2015 that its stock closed below the $1.00 minimum bid price for 30 business days, giving it a 180-day grace period (with a possible second 180 days) to get back above $1.00 for ten consecutive days. The earlier $35 million market value shortfall from February is also still unresolved, with a deadline of August 25, 2015; failing that, ZaZa would get a delisting notice that it could appeal. This shows the stock price has fallen further since the 2014 reverse split.

listing compliance notice

On June 30, 2015, the senior noteholders agreed to a further extension of the ~$13.9 million senior note prepayment, from June 30 to July 15, 2015. The filing mentions no fee for this extension. ZaZa says it is talking with third-party financing sources about refinancing, with no assurance it will succeed. The repayment deadline keeps being pushed back while the debt remains unresolved.

debt financing

On May 29, 2015, ZaZa and the senior noteholders agreed to push the repayment of the ~$13.9 million senior secured notes from May 29 to June 30, 2015. ZaZa agreed to pay a cash consent fee of an additional 3% of the principal, on top of the 3% amendment fee already owed. No refinancing is reported; the debt remains outstanding.

debt financing

ZaZa raised $2.5 million gross by selling 2,500 shares of Series A 5% convertible preferred stock to Alpha Capital Anstalt, plus warrants for 1,875,000 shares at $2.25. The preferred converts into 2,500,000 common shares, ranks ahead of common stock on dividends and liquidation, and is non-voting; conversion/exercise is capped at 19.99% of the common stock unless shareholders approve at the 2015 annual meeting. Warrants first become exercisable October 30, 2015. Northland Securities was placement agent for a 7.0% cash fee. Founders and related holders also signed lock-up agreements (details truncated in the excerpt). This adds potential dilution and a senior claim ahead of common holders.

capital raising announcement

Amendment No. 8 was signed on April 21, 2015, moving the senior note repayment date from May 6 to May 29, 2015. But it now requires ZaZa to repay all the senior secured notes, about $13,930,889, on May 29, rather than just the notes of holders who demanded payment. As the price of the extension, the noteholders' warrants were repriced from $15.96 to $2.50 per share, covering 3,404,275 shares, which could dilute shareholders if exercised. ZaZa says it is talking with multiple parties about refinancing, with no assurance.

debt financing

Several senior secured noteholders have now demanded repayment: MSDC and Winmill on April 6, 2015, and Senator, Talara and Blackwell on April 8. Without an extension, ZaZa must repay about $12.76 million by May 6, 2015, and other holders could also demand payment on the same date. Holders of about 93% of the notes agreed to a further 30-day delay (Amendment No. 8), but it needs all holders and a ~7% minority has asked for warrant re-pricing and a higher coupon. ZaZa says it is also pursuing refinancing, with no assurance of success. It also sets the annual meeting for June 16, 2015 (record date May 5).

debt financing

Nasdaq told ZaZa on February 26, 2015 that its market value of listed securities had been below the $35 million minimum for 30 business days. The listing is not affected immediately; ZaZa has 180 days to get back above $35 million for at least ten consecutive business days, or face a delisting notice (which it could appeal). This is a new listing problem, separate from the earlier bid-price issue addressed by the reverse split.

listing compliance notice

ZaZa and its senior secured noteholders signed Amendment No. 7, moving the earliest date holders can demand repayment of the $13.9 million notes from February 21 to March 23, 2015, and cutting the company's time to repay after a demand from 60 to 30 days. It also gives relief from the going-concern requirement for FY2014 accounts and waives technical defaults caused by the January 19, 2015 subordinated note changes. This continues the effort to delay the put; no refinancing is announced. The filing also furnishes an updated investor presentation (the excerpt shows 13.1 million shares outstanding and $2.11 stock price on 2/24/2015, $6.3 million cash and $101.2 million total debt at 12/31/2014, current production ~600 boe/d).

debt financing

The founders' $47.3 million 8% subordinated notes will no longer be swapped for common shares and preferred stock, as agreed in February 2014. Instead, from January 1, 2015 interest is added to the principal rather than paid in cash. Maturity stays August 21, 2017. This replaces the earlier plan, so the dilution from that exchange is off, and the change does not wait for the senior note refinancing. The senior secured notes can be put back to ZaZa from February 21, 2015, with up to 60 days to repurchase. The company says it is still trying to refinance them or push back that date.

debt financing

ZaZa settled a dispute with Crede over the July 2014 warrants. After the 10-for-1 reverse stock split effective August 19, 2014, the warrants covered 361,493 shares, and the two sides disagreed over how many shares an exchange would yield. ZaZa will issue 787,530 shares now and 212,470 more later, 1,000,000 in total, in return for all the warrants. Both sides released each other from further obligations under the July agreement. Inference: the second $2.5 million closing no longer appears to apply. This resolves the Crede warrant terms with more shares than the company said it owed.

material agreement

The Quantum sale of 6,000 net acres of East Texas JV leases closed on September 18, 2014 for about $17 million. That is $11 million in cash plus the right to Quantum's interest in certain future wells. A separate development agreement sets up a shared area for future acreage purchases. Of the cash, $1.1 million had to go to repay the senior secured notes, bringing them to $13.9 million. The rest is meant for drilling and lease costs. This completes the deal announced August 27.

asset acquisition disposition

ZaZa agreed to sell Quantum Energy Partners an affiliate's roughly 4% working interest (6,000 net acres) in undeveloped East Texas JV leases. In return it gets about $17 million in cash plus the right to take Quantum's interest in the next 15 JV wells. ZaZa keeps its interest in existing wells and will receive ongoing G&A reimbursement. Two years after closing, Quantum can require ZaZa to buy back its interest at a price based on Quantum's lease costs. Closing needs approval from the existing JV partner and is not assured.

material agreement

ZaZa agreed to sell 6,024,097 new shares at $0.83 each, plus warrants for 3,614,459 shares at $1.1205, to Crede CG III, Ltd. Net proceeds are expected to be about $4.56 million. A further $2.5 million of shares and warrants is to be sold by October 20, 2014 at a price set nearer the time. The press release says the money is for East Texas development and lease acquisitions. Existing shareholders are diluted, and the warrants add more potential dilution.

material agreement

On March 31, 2014 ZaZa set up an at-the-market programme with MLV & Co. to sell common shares from time to time under its $150M shelf, paying MLV 3% of gross proceeds; no amount sold is stated. It also reported 2013 results: revenue of $8.9M, a net loss of $67.6M including a $104.6M impairment, and $15.2M of cash at year-end. The release says the subordinated note exchange is conditional on extinguishing the senior secured notes. Selling shares could dilute holders (an inference).

material agreement

On March 18, 2014 NASDAQ told ZaZa its shares had closed below the $1.00 minimum bid price for 30 consecutive business days. There is no immediate effect on trading; the company has 180 days to get back above $1.00 for ten straight days, with a possible second 180 days, otherwise delisting. The stock was $0.78 on the day before the release, and the company says it is evaluating options.

listing compliance notice

The March 7 EOG Phase III amendment closed on March 18, 2014, with ZaZa receiving about $4.7M cash and the carry of up to about $9.2M. Separately, on March 14 holders of the senior secured notes (now $15M, plus warrants for 27,433,244 shares) agreed to Amendment No. 6, extending to the 2013 financial statements the same relief from going-concern requirements already given for 2012. This completes the EOG Phase III thread and keeps the senior note terms workable.

material agreement

On March 7, 2014 ZaZa amended its EOG joint venture to assign about 9,600 net acres (a 75% interest in its remaining Phase III acreage) to EOG for about $4.7M cash plus a carry of up to about $9.2M of future drilling and completion costs. EOG also committed to drill two more test wells, the first starting by July 1, 2014. The Range participation agreement was terminated, with Range's rights having passed to EOG. This resolves the open question of whether EOG would elect into the remaining ~12,300 Phase III acres, and the press release says ZaZa also received $1.1M from its partner related to the Range agreement.

material agreement termination

On February 24, 2014 ZaZa agreed to swap the $47.3M of subordinated notes held by its three founders (CEO Brooks, and directors Hearn and Kearby, via their entities) into about 9.48M new common shares (valued at $0.9495 each) and new 13% preferred stock with a $37.4M total liquidation preference. The swap closes only once the remaining $15.0M of senior secured notes is repaid in full, and the company says it plans to fund that from a notes offering that was not yet effective. This continues the debt-reduction thread after the February Hess settlement; the company says pro forma total debt would be about $55M, down from $113.6M at Dec 31, 2013. It would dilute existing common holders and adds preferred stock ranking ahead of them (the latter is an inference). A special committee of independent directors approved it.

capital raising announcement

On February 6, 2014 ZaZa settled with Hess over the old joint ventures. The $15.0M escrow held since 2012 was released: about $11.5M to ZaZa and about $3.5M to Hess. Hess gave up its right to proceeds from ZaZa's litigation over certain Texas leases, and the Paris Basin overriding royalty interests were terminated. ZaZa used the $11.5M plus about $1.1M of its own cash to prepay the 8% senior secured notes, cutting them from $26.8M to $15.0M principal, and says all required early paydowns are now done. The prepayment includes about $850,000 of accrued interest and premium. This closes the escrow release thread and leaves a smaller senior secured balance.

material agreement

The amended EOG deal announced in September closed on October 15, 2013, with some terms changed. ZaZa assigned about 20,000 net Phase II acres and about 7,800 former Phase III acres (rather than the 6,000 minimum first announced). It received $17M cash for Phase II, a further $1.5M cash payment, and interests in 15 EOG producing wells. In the acreage swap it paid about $700,000, down from the roughly $2M first stated. The company's release says it received $17.8M net cash, interests in 23 wells with about $17M of PDP value per an independent report, and a 25% interest in about 19,000 acres. About 12,300 Phase III acres remain, which EOG can elect into by January 31, 2014.

material agreement

On September 25, 2013 ZaZa signed an amended agreement with EOG Resources that speeds up the joint venture phases it agreed in March. EOG moves into Phase II early: ZaZa assigns 20,000 net acres for $17M cash plus about $3M of interests in EOG's producing wells, and a further $1.5M cash payment. ZaZa also assigns at least 6,000 former Phase III acres for about $9M of production interests, and swaps acreage with EOG (ZaZa gets 25% of about 19,000 acres, gives up about 13,875 acres and pays about $2M). The company's release puts net cash at $16.5M. This continues the EOG JV thread, and the deal had not closed as of this filing.

material agreement

The Moulton sale to SN Marquis (a Sanchez Energy subsidiary) closed on July 26, 2013: about 10,300 net acres and seven producing wells, for about $28.8M, with $29.3M in cash received. The filing also says the earlier ~$9.2M sale to the same buyer closed on April 5, 2013 with $8.8M received, which settles the open question about the remaining-acreage sale. The company's release says it intends to use part of the proceeds to cut debt as its debt agreements require.

asset acquisition disposition

ZaZa ended the March BEP Moulton sale (about $43.3M) on June 27, 2013 because it had not closed by the outside date; the company's release says the buyer could not fund and close. It signed a new deal with SN Marquis, LLC (a Sanchez Energy subsidiary) to sell about 10,300 net Moulton acres with seven producing wells for about $28.8M, a deposit of about $1.4M received, closing expected by July 31, 2013. That is roughly $14.5M less than the failed deal's price, though the acreage covered differs slightly. The earlier plan to sell the remaining Moulton acreage for about $9.2M is not mentioned here.

material agreement termination

ZaZa agreed to sell about 10,000 net Moulton acres in the Eagle Ford, with seven producing wells, to BEP Moulton, LLC for about $43.25M cash (about $42M net), expected to close in Q2 2013. The press release adds that closing needs an amendment to the senior secured notes agreement, and a second agreement sells the remaining Moulton acreage for about $9.2M, for about $52.5M combined. Proceeds are meant for exploration spending and/or paying down the senior notes. This carries out the plan to sell Eagle Ford assets received in the Hess split.

material agreement

ZaZa signed a joint development agreement with EOG Resources for about 100,000 gross (73,000 net) Eaglebine acres, in three phases. EOG operates and earns up to 75% working interest where ZaZa owned 100%, with ZaZa keeping 25%. Phase I brings $10M cash plus three wells paid by EOG for 20,000 net acres; phases II and III are EOG's option, at $20M each plus three wells each for 20,000 and 15,000 net acres. This builds on the Range arrangement, with the substitute well due to Range becoming the second Phase I well. The press release does not name EOG, and says ZaZa keeps 19,000 net acres at 100%.

material agreement

ZaZa stopped drilling the Grimes County commitment well with Range and signed Amendment No. 5 (effective Jan 16, 2013): 60 days to start re-completing it as a vertical well and 180 days to start a substitute well. If it misses the deadlines and has no sales from the substitute well by Sept 1, 2013, it must give Range a further 25% (leaving ZaZa 50%) and hand over operatorship. ZaZa bears 100% of the cost of the original and re-entry wells. The same day's release says the Stingray A-1H lateral was lost to a casing collar failure after multiple remediation attempts, which contradicts the earlier plan to fix the restriction and start sales; it will be re-entered and tried as a vertical well. Commodore A-1 was drilling at 12,237 ft with liquid shows, and the Boening A-1H was fracked with first production expected early to mid-February.

material agreement

On December 21, 2012 ZaZa closed the sale of ZaZa Energy France SAS to Vermillion REP SAS, receiving about $76.0 million net purchase price and about $68.0 million after advisor fees, liquidation costs and taxes. About half of the net proceeds went to pay down the senior secured notes, $15.0 million is held in escrow until the Paris Basin permits transfer to Hess, and the rest is for the development program. This completes the French part of the Hess exit that had been awaiting approval, and the press release says the permit title transfer is expected in 2013. The filing does not give the remaining senior note balance; the CEO's quote says over two-thirds of the senior secured debt has been paid down in under a year.

asset acquisition disposition

ZaZa said on December 11, 2012 that France's ministers had issued a letter of non-objection on December 10 to the sale of the French subsidiary to Vermilion, which it still expected to close by year-end. It also said the Stingray well in the Eaglebine hit a restriction during completion that will limit production in the near term, and that it plans to start sales by December 16 to meet its Range obligation and then shut the well in to fix it. ZaZa plans to sell two Eagle Ford prospects (Dilley, about 2,000 net acres, and Hackberry/Oakland, about 23,000) in the first quarter of 2013, leaving about 47,000 net acres. Management said senior executives intend to buy shares in the open market.

production update

On November 13, 2012 ZaZa agreed to sell all the shares of ZaZa Energy France SAS to Vermillion REP SAS (a Vermillion Energy subsidiary) for $85.8 million cash, before adjustments, with closing expected before the end of 2012. ZaZa plans to use part of the proceeds to pay down its senior secured notes and speed up Texas drilling, and $15.0 million will sit in escrow until the Paris Basin permits are transferred to Hess. This is the French side of the Hess deal that was still pending; closing needs government approvals, Hess France's consent and senior noteholder approval of an intercompany loan transfer. The attached earnings release also reports third-quarter total revenues and other income of $207.2 million, including $197.0 million of other income, and net income to common shareholders of $133.8 million. It also says the 10-K and the first two 10-Qs were filed and NASDAQ confirmed full compliance, which resolves the earlier listing thread.

material agreement

On October 22, 2012 ZaZa sold $40 million of 9% convertible senior notes due August 1, 2017 in a private placement at $950 per $1,000, for gross proceeds of $38.0 million and about $35.2 million net. The money is meant for drilling spending, leasehold deals and general corporate purposes. The notes are unsecured and can be converted into shares at $2.50 each (400 shares per $1,000 note), so they could dilute existing shareholders if converted. The same day's filing also records a third amendment to the secured noteholders' agreement that allows this new debt and changes the terms of their warrants.

capital raising announcement

On August 15, 2012 NASDAQ sent a third non-compliance letter, for the late quarterly report (10-Q) for June 30, 2012, requiring an update to ZaZa's compliance plan by August 30, 2012. Trading is not suspended; ZaZa says it expects to file soon, helped in part by completing the Hess transaction. The earlier 10-K and March 10-Q filings are still not shown as filed in this record.

listing compliance notice

On July 25, 2012 ZaZa closed the Texas side of the Hess deal agreed in June: it received about $69 million cash and about 60,500 more net Eagle Ford acres (core now about 72,000 net acres), and Hess got about 4,490 net acres in the Cotulla area plus small royalties. The French part awaits government approval. ZaZa then paid down $33.0 million of the senior notes plus a $3.5 million fee, under amended terms including a rate step-up to 10% if the notes are not at $35 million by Feb 21, 2013. The filing says the Hess partnership ended after the sides had different understandings of Hess's obligations, and that French fracking legislation had cut the value of the French agreements. CEO Craig McKenzie resigned effective August 1 with a $550,000 lump sum and other benefits, and Todd Alan Brooks became CEO.

asset acquisition disposition

On June 8, 2012 ZaZa signed a non-binding Heads of Agreement with Hess to end their 2010 Eagle Ford and Paris Basin deals. If completed, ZaZa would get $70 million cash, about 60,500 more net Eagle Ford acres (taking its core to about 72,000 net acres), a share of any Hess sale proceeds above $1 billion, and would hand over its 50% Paris Basin exploration licence interest while keeping a 5% revenue interest capped at $130 million. Hess also paid $15 million on June 8 to drop its well-carry obligation in the Cotulla area. Alongside, noteholders waived existing defaults (including late audited financials) and will consent if ZaZa pays down $33 million of the senior notes plus a $3.5 million fee; the rate rises to 10% if the notes are not at $35 million by Feb 21, 2013. ZaZa also hired Jefferies to seek joint venture partners.

material agreement

On May 21, 2012 NASDAQ sent a second non-compliance letter, this time for the late quarterly report (10-Q) for March 31, 2012, with a compliance plan due by June 18, 2012. This adds to the April notice over the unfiled 2011 10-K; the company says trading is unaffected and it expects to file soon.

listing compliance notice

NASDAQ told ZaZa on April 17, 2012 that it is out of compliance with listing rules because its 2011 annual report (Form 10-K) has not been filed. ZaZa must submit a plan to regain compliance within 60 days; trading is not affected for now, and the company expects to file the 10-K soon.

listing compliance notice

On March 28, 2012, ZaZa agreed with Range Texas Production, LLC (a Range Resources subsidiary) to acquire a 75% working interest in Grimes County, Texas leases (about 61,123 gross / 37,837 net acres), with Range keeping 25%. ZaZa becomes operator, must drill a commitment well by July 1, 2012 and pay for it fully until sales start, make two cash payments (amounts not disclosed), and lose the interest if it misses the July 1 drilling or November 1, 2012 first-sales deadlines. The press release says this takes its Eaglebine holding to about 144,123 gross (89,378 net) acres and a six-well drilling program starting May 2012.

material agreement

On February 21, 2012, ZaZa raised $100 million through 8% senior secured notes due February 21, 2017, sold with warrants over 26,315,789 shares at $3.15 each to MSDC ZEC Investments and Senator Sidecar Master Fund. The proceeds are to repay Toreador's convertible notes, pay combination fees and fund working capital. The filing also says the combination with Toreador closed, with the former ZaZa LLC owners receiving $47.33 million of 8% subordinated notes (due August 17, 2017). The notes are secured by a first-priority lien on substantially all assets of the company and its domestic subsidiaries. The warrants would be about 20.6% of the fully diluted shares, so exercise would dilute existing holders.

business combination

Nasdaq certified ZaZa Energy Corp's securities for listing, clearing them to begin trading.

listing compliance notice

ZaZa Energy Corporation, a newly formed holding company, filed to register up to 25,319,341 shares for a planned combination of ZaZa Energy, LLC and Toreador Resources Corporation under an agreement dated August 9, 2011. Toreador holders would get one new share per Toreador share and own 25% of the combined company, with ZaZa's current owners holding 75%. The combined company would hold about 435,000 net acres across the Eagle Ford and Eagle Ford/Woodbine in Texas and the Paris Basin in France, and expects to list on Nasdaq as ZAZA. The deal still needs a Toreador shareholder vote and SEC effectiveness.

business combination