PetroQuest lenders, noteholders extend forbearance until Oct. 31

By Marisa Wong

Morgantown, W.Va., Oct. 19 – PetroQuest Energy, Inc. said it extended its previously announced forbearance agreements with the administrative agent and the lenders under its multi-draw term loan agreement, the holders of about 77.9% of the outstanding principal amount of its 10% second-lien secured senior notes due 2021 and the holders of roughly 70.7% of the outstanding principal amount of its 10% second-lien senior secured PIK notes due 2021.

Under the forbearance agreements, the creditors have agreed to forbear from exercising any and all remedies available to them under the loan agreement and the indentures governing the 2021 notes and the 2021 PIK notes as a result of the company not making the semiannual interest payments totaling $14.2 million due on Aug. 15, 2018 with respect to the 2021 notes and the 2021 PIK notes and that non-payment continuing for a period of 30 days.

The forbearance agreements will now expire upon the earlier of 11:59 p.m. ET on Oct. 31 or the occurrence of events specified in the forbearance agreements.

The company said it is continuing to analyze and evaluate various alternatives with respect to its capital structure and financial position, which may include private debt exchanges or filing for protection under Chapter 11 of the U.S. Bankruptcy Code.

In addition, the company is engaged in discussions and negotiations with the creditors and their legal and financial advisers regarding these alternatives.

The forbearance agreements are intended to allow the parties to continue these discussions and negotiations and work toward an alternative that addresses the company’s capital structure and financial position, the company said.

The company said it does not intend to disclose or comment on developments related to its review and these discussions and negotiations unless and until its board of directors has approved a specific alternative or transaction or otherwise determined that further disclosure is appropriate.

As previously disclosed, on Aug. 31, the company borrowed $50 million under the loan agreement and repaid $32.5 million of outstanding borrowings under its prior loan agreement, plus accrued interest and fees, and retained the balance of the borrowings for general corporate purposes.

As a result, the company currently has no borrowing availability under the loan agreement and as of Sept. 30 had about $25.4 million of cash on hand.

The company said it is continuing to pay suppliers and trade creditors and fund current operations on an ongoing basis.

PetroQuest has retained Seaport Global Securities as its financial adviser and Porter Hedges LLP as its legal adviser to assist its board of directors and management team.

PetroQuest is an oil and natural gas explorer and producer based in Lafayette, La.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.