American Energy – Permian Basin extends exchange offers to Aug. 9

By Sarah Lizee

Olympia, Wash., Aug. 6 – American Energy – Permian Basin, LLC and subsidiary AEPB Finance Corp. announced that they further extended to midnight ET on Aug. 9 from midnight ET on Aug. 5 the exchange offers for their $460 million 13% senior secured first-lien notes due 2020, $291,652,000 8% senior secured second-lien notes due 2020, $229,359,000 floating-rate senior notes due 2019, $592,958,000 7 1/8% senior notes due 2020 and $526,069,000 7 3/8% senior notes due 2021.

The expiration was previously extended to July 26 from July 16, then to July 31, and then again to Aug. 5.

As of 5 p.m. ET on Aug. 5, 8.3% of the notes had been tendered and not withdrawn, including $62,858,000 principal amount, or 13.66%, of the 13% first-lien notes; $13,742,000 principal amount, or 4.71%, of the 8% second-lien notes; and $97,604,000 principal amount, or 7.24%, of the floating-rate notes, 7 1/8% notes and 7 3/8% notes, according to a press release on Tuesday.

As announced on May 3, the issuers are offering

• $1,000 principal amount of new 13% senior secured first-lien notes due 2023 in exchange for the existing 13% first-lien notes;

• $1,000 principal amount of new 10% senior secured second-lien notes due 2023 in exchange for the 8% second-lien notes;

• $600 principal amount of new 10%/12% senior secured third-lien PIK toggle notes due 2024 in exchange for the floating-rate notes;

• $550 principal amount of the new PIK toggle notes in exchange for the 7 1/8% notes; and

• $550 principal amount of the new PIK toggle notes in exchange for the 7 3/8% notes.

Each total consideration noted above is payable to holders who tendered their notes by the early tender time, 5 p.m. ET on June 5.

Holders who tender their notes after the early deadline but prior to the offer expiration will only be eligible to receive the exchange consideration, which is the total consideration less $50 principal amount of new notes for each $1,000 principal amount of existing notes.

The issuers will also pay in cash accrued interest to but excluding the applicable settlement date. The early settlement date was expected to be soon after the early tender time, and the final settlement date will follow soon after the expiration time.

In connection with the exchange offers, the issuers are also soliciting consents from eligible noteholders to amendments to the indentures governing the notes to eliminate substantially all of the restrictive covenants, specified events of default and certain other provisions as well as the release of the liens on all of the collateral securing the existing first-lien notes and second-lien notes.

The proposed amendments will become effective for each series of old notes – or, with respect to the existing senior notes, all three series taken together as one class – for which participation in the related exchange offer exceeds 50%. With respect to the release of liens on all of the collateral securing the existing first- and second-lien notes, participation must exceed 66 2/3%.

The exchange offers are conditioned on the minimum tender of at least 95% of the aggregate principal amount of each series of notes.

The exchange agent and information agent for the exchange offers is D.F. King & Co., Inc. (212 269-5550, 800 549-6697 or aepb@dfking.com).

Restructuring discussions

As previously reported, American Energy said it is in ongoing discussions about a restructuring support agreement with a majority of holders of the notes.

According to Tuesday’s release, the company is in continuing discussions regarding the restructuring support agreement.

The participating holders collectively own greater than 85% of each class of notes.

The restructuring support agreement would, among other things, include an out-of-court transaction and a concurrent solicitation of votes in favor of a pre-packaged plan of reorganization to be filed under Chapter 11 of the U.S. Bankruptcy Code if the conditions of the out-of-court transaction have not been met or waived by an agreed date that is expected to be in August.

The company said that while negotiations are ongoing, it does not currently intend to make a payment in respect of the principal of the floating-rate notes, which were scheduled to mature on Aug. 1. However, the out-of-court transaction will be available to all eligible holders of notes, including the floating-rate notes.

American Energy – Permian Basin, formerly known as Sable Permian Resources Land, LLC, is an independent oil and natural gas company based in Houston.

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