Pacific Exploration & Production confirmed that it is continuing to work with its creditors to formulate a comprehensive financial restructuring that will reduce debt, improve liquidity and position the company to navigate the current oil price environment.
The company, in conjunction with its creditors, is evaluating methods to restructure its balance sheet, ensure the long-term viability of its business and preserve the company’s asset base.
As previously announced, the company is in default under certain of its debt instruments, including $1.3 billion principal amount 5.375% senior notes due 2019 and $1.114 billion principal amount 5.625% senior notes due 2025.
It is also in default under credit agreements, including:
- $1 billion revolving credit and guaranty agreement with a syndicate of lenders led by Bank of America as administrative agent;
- $250 million credit and guaranty agreement with HSBC Bank USA as agent; $109 million credit and guaranty agreement with Bank of America as lender; and
- $75 million master credit agreement with Banco Latino Americano de Comercio Exterior as lender.
The company has entered into agreements with holders of the 2019 notes and the 2025 notes and with the credit facilities lenders, which will remain in effect until the expiration of that forbearance period on April 29, 2016.
The noteholders have agreed to forbear from declaring the principal amounts of the notes due and payable as a result of certain specified defaults.
The bank lenders have agreed to forbear from declaring the principal amounts of the credit facilities due and payable as a result of certain specified defaults.
Upon the termination of the forbearance period, all of the company’s debt will potentially become due and payable. As the company does not have the capital resources to repay such amounts, it has been working with its creditors toward a comprehensive financial restructuring of the company.