HOUSTON, Oct. 10, 2014 /PRNewswire/ -- Endeavour
International Corporation (NYSE: END) (LSE: ENDV) today announced
that the Company has executed a Restructuring Support Agreement
("RSA") with holders of more than two-thirds (2/3) of its 12% First
Priority Notes, 12% Second Priority Notes, 7.5% Convertible Bonds
and 5.5% / 6.5% Convertible Notes (collectively, the "Notes") to
restructure the Company's debt obligations. In connection
therewith, the Company and certain of its subsidiaries have each
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware ("Chapter 11 Proceedings"). The
Company's U.K. subsidiaries and certain other affiliates have not
sought bankruptcy protection and will continue to operate outside
of any reorganization proceedings. Endeavour and its debtor
affiliates will continue to operate as "debtors in possession" in
the Chapter 11 Proceedings.
Pursuant to the RSA, the Company's existing debt will be reduced
by approximately $568 million
including the cancellation of all of the Company's Notes and reduce
its annual interest burden by 43%. As consideration for such
cancellation, the reorganized Company would issue (a) $262.5 million of new 9.75% notes to the holders
of its 12% First Priority Notes, (b) an aggregate of approximately
$237.5 million of new 3.5%
convertible preferred shares to holders of its 12% First Priority
Notes and 12% Second Priority Notes, and (c) common shares to
holders of its 12% Second Priority Notes, 7.5% Convertible Bonds,
6.5% Convertible Notes and 5.5% Convertible Notes. All of the
Company's existing equity securities, including its shares of
common stock and preferred stock, will be cancelled, without
receiving any distribution.
The $440 million senior secured
term loan incurred by Endeavour Energy UK Limited and certain other
of the Company's foreign subsidiaries will not be affected by the
restructuring.
Endeavour expects its oil and gas operations to continue in the
ordinary course throughout the Chapter 11 Proceedings. The Company
believes that the rights and protections afforded it by a
court-supervised reorganization process will provide Endeavour with
the time and flexibility it needs to address its financial
challenges, delever its balance sheet and position the Company for
the longer term.
The filing is principally the result of a series of events
during a period of time when the Company was heavily involved in
the development of two large assets in the U.K. North Sea. In
Endeavour's circumstances, its two large North Sea developments –
Bacchus and Rochelle, were each over a year delayed in coming to
first production, which caused cost overruns from the original cost
projections. These delays also substantially impacted the cash flow
and operating margins the Company would have received had the
projects come online as scheduled. To maintain its ownership rights
in these valuable assets, Endeavour incurred additional debt at a
high cost of capital. As of the filing, the large capital
commitment for most of the North Sea assets has been completed and
the assets are online.
"Today's RSA and the required Chapter 11 Proceedings is a step
forward for the Company to move expeditiously through the
reorganization process," said William L.
Transier, chairman, chief executive officer and president.
"It has been a significant accomplishment by the Company and a very
long process to get our North Sea developments online. We continue
to believe that these are quality long lived assets that can
generate substantial returns for the Company's stakeholders. The
RSA and ensuing reorganization process is important to the
preservation of these assets for our investors."
The Company is in process of filing various "first-day" motions
seeking customary relief from the U.S. Bankruptcy Court to
facilitate its transition into the Chapter 11 Proceedings.
About Endeavour International Corporation
Endeavour International Corporation is an oil and gas
exploration and production company focused on the acquisition,
exploration and development of oil and natural gas in the North Sea
and the United States. For more
information, visit www.endeavourcorp.com.
Forward-looking Statements
This press release contains certain "forward-looking
statements," as such term is defined in Section 21E of the
Securities Exchange Act of 1934, as amended, relating to future
events and the financial performance of Endeavour. Such statements
are only predictions and involve risks and uncertainties, resulting
in the possibility that actual events or performance will differ
materially from such predictions as a result of certain risk
factors. As such, readers are cautioned not to place undue reliance
on forward-looking statements, which speak only to management's
plans, assumptions and expectations as of the date hereof. Please
refer to Endeavour's Annual Report on Form 10-K for year ended
December 31, 2013, filed with the SEC
on March 17, 2014, Form 10-K/A filed
on March 21, 2014 and other filings
for a discussion of material risk factors. Endeavour disclaims any
duty to update or alter any forward-looking statements, except as
required by applicable law.
SOURCE Endeavour International Corporation
