Energy XXI Makes EPL Interest Payment and Enters Grace Period on EGC Interest Payments
March 15 2016 - 6:15AM
Energy XXI (NASDAQ:EXXI) today announced that it has made the
interest payment due on its EPL Oil and Gas, Inc. 8.25% Senior
Notes. This follows the Company’s decision to defer this interest
payment originally due on February 16, 2016, commencing a 30-day
grace period.
As previously announced, the Company continues to work with its
financial and legal advisors to analyze a variety of solutions to
reduce its overall financial leverage, while maintaining primary
focus on preserving liquidity. As part of this process,
Energy XXI continues to engage in discussions with its debtholders
and other stakeholders to develop and implement a comprehensive
plan to restructure its balance sheet. Operations are
continuing as normal while these discussions are ongoing.
As Energy XXI continues these discussions, the Company has
elected not to make interest payments due on Energy XXI Gulf Coast,
Inc.’s (“EGC”) outstanding 11% Senior Secured 2nd Lien Notes and
EGC’s outstanding 6.875% Senior Notes due on March 15, 2016,
commencing a new 30-day grace period. The decision not to
make these interest payments does not constitute an event of
default; however, if the Company does not make the interest
payments or restructure the debt before the grace period expires,
the holders of the notes could accelerate amounts due under the
notes and a default and acceleration under the Company’s other debt
instruments could also occur.
In addition, the Company has obtained an extension on the waiver
to certain requirements under its Second Amended and Restated First
Lien Credit Agreement (provided pursuant to the Thirteenth
Amendment and Waiver dated February 29, 2016) until April 15, 2016,
unless terminated earlier pursuant to the terms of the
waiver. In conjunction with the waiver, the Company has
agreed to reduce its borrowing base from $500 million to $377.7
million and unwind certain hedging transactions and use the
proceeds therefrom to repay amounts of outstanding loans to EPL
under the Credit Agreement, with the repayments resulting in a
further reduction in the borrowing base of EGC and EPL. The
full details of the waiver agreement have been filed on form 8-K
with the Securities and Exchange Commission.
PJT Partners LP is serving as Energy XXI’s financial advisor and
Vinson & Elkins L.L.P. is serving as its legal
advisor.
Forward-Looking Statements All statements
included in this release relating to future plans, projects, events
or conditions and all other statements other than statements of
historical fact included in this release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based upon current
expectations and are subject to a number of risks, uncertainties
and assumptions. It is not possible to predict or identify all such
factors and the following list should not be considered a complete
statement of all potential risks and uncertainties. Certain risks
and uncertainties include the current depressed commodity pricing
environment affecting the oil and gas industry, whether Energy XXI
is able to successfully restructure its indebtedness, improve its
short- and long-term liquidity position or complete any strategic
transactions, among others, that could cause actual results,
including project plans and related expenditures and resource
recoveries, to differ materially from those described in the
forward-looking statements. For a more detailed discussion of risk
factors, please see Part I, Item 1A, "Risk Factors" of our most
recent Annual Report on Form 10-K and Part II, Item 1A, “Risk
Factors” of our Quarterly Report on Form 10-Q for the period ended
December 31, 2015 for more information. Energy XXI assumes no
obligation and expressly disclaims any duty to update the
information contained herein except as required by law.
About the Company Energy XXI is an independent
oil and natural gas development and production company whose growth
strategy emphasizes acquisitions, enhanced by its value-added
organic drilling program. The Company's properties are located in
the U.S. Gulf of Mexico waters and the Gulf Coast onshore. To learn
more, visit the Energy XXI website at www.EnergyXXI.com.
Enquiries of the CompanyAndrew ColemanVP,
Business Development and Investor
Relations713-351-3171acoleman@energyxxi.com
David GriffithAssociate, Investor
Relations713-351-3176dgriffith@energyxxi.com
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