HOUSTON, Nov. 20, 2017 /PRNewswire/ -- EP Energy LLC
("EP Energy"), a wholly-owned subsidiary of EP Energy Corporation
(NYSE: EPE), today announced that it and its wholly-owned
subsidiary, Everest Acquisition Finance Inc., as co-issuer
(together with EP Energy, the "Issuers"), have launched exchange
offers (the "Exchange Offers") to exchange up to $1.2 billion aggregate principal amount (subject
to change, the "Maximum Exchange Amount") of new 9.375% Senior
Secured Notes due 2024 (the "New Notes") for the Issuers'
outstanding Senior Notes listed in the table below (collectively,
the "Old Notes").
Exchange Offers
The Old Notes and other information relating to the Exchange
Offers are set forth below.
|
|
|
|
|
|
|
Consideration per
$1,000 Principal Amount of Old Notes Tendered
|
Title of Old
Notes to be
Tendered
|
|
CUSIP/ISIN
Number(s)
|
|
Outstanding
Principal
Amount
|
|
Acceptance
Priority Level
|
Total
Consideration
if Tender
prior to
the Early
Tender Time
|
|
Exchange
Consideration
if Tender
after the
Early Tender
Time
|
|
|
|
|
|
|
|
|
|
|
9.375% Senior Notes due
2020(1)
|
|
29977HAB6 /
US29977HAB69
|
|
$1,200,204,000
|
|
1
|
$1,000 aggregate
principal amount of New Notes
|
|
$950 aggregate
principal amount of New Notes
|
7.750% senior notes due
2022, subject to the Priority Level 2
Condition(2)
|
|
268787AB4 /
US268787AB41 268787AA6 /
US268787AA67
U2937LAA2 / USU2937LAA27
|
|
$250,060,000
|
|
2
|
$725 aggregate
principal amount of New Notes
|
|
$675 aggregate
principal amount of New Notes
|
6.375% senior notes due
2023 subject to the Priority Level 2
Condition(2)
|
|
268787AD0 /
US268787AD07 268787AC2 /
US268787AC24 U2937LAB0 /
USU2937LAB00
|
|
$518,518,000
|
|
2
|
$725 aggregate
principal amount of New Notes
|
|
$675 aggregate
principal amount of New Notes
|
7.750% senior notes due
2022
|
|
268787AB4 /
US268787AB41 268787AA6 /
US268787AA67
U2937LAA2 / USU2937LAA27
|
|
$250,060,000
|
|
3
|
$700 aggregate
principal amount of New Notes
|
|
$650 aggregate
principal amount of New Notes
|
6.375% senior notes due
2023
|
|
268787AD0 /
US268787AD07 268787AC2 /
US268787AC24 U2937LAB0 /
USU2937LAB00
|
|
$518,518,000
|
|
3
|
$700 aggregate
principal amount of New Notes
|
|
$650 aggregate
principal amount of New Notes
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All 2020 Notes are
Acceptance Priority Level 1 notes ("Priority 1 Notes"). In
the event that an aggregate principal amount of 2020 Notes tendered
exceeds the Maximum Exchange Amount, the Issuers intend to increase
the Maximum Exchange Amount in order to accept all 2020 Notes
tendered. In addition, under certain circumstances, the
Issuers may increase the Maximum Exchange Amount to up to
$1,400 million based on demand in the Exchange Offers.
|
(2)
|
Any Eligible Holder
who tenders 2020 Notes is also eligible to exchange 2022 Notes or
2023 Notes (or a combination thereof), up to the amount of 2020
Notes tendered by such Eligible Holder (with such 2022 Notes and
2023 Notes to be accepted on a pro rata basis), as Acceptance
Priority Level 2 notes ("Priority 2 Notes"); provided that if an
Eligible Holder tenders both 2022 Notes and 2023 Notes, only pro
rata amounts of the 2022 Notes and 2023 Notes, the sum of which
equals the total amount of 2020 Notes tendered by such holder, will
be eligible for Acceptance Priority Level 2 (the "Priority Level 2
Condition"). Any 2022 Notes and 2023 Notes tendered in excess
of the amount of 2020 Notes tendered by an Eligible Holder will be
eligible for acceptance on a pro rata basis under Acceptance
Priority Level 3 ("Priority 3 Notes").
|
Additional Information
Subject to the limitations described in the confidential
offering memorandum and consent solicitation statement (the
"Offering Memorandum") and to proration (if necessary), Old Notes
properly tendered (and not withdrawn) will be accepted in order of
the Acceptance Priority Levels indicated in the table above, with
Level 1 being the highest priority level and 3 being the lowest
priority level. In determining whether the Maximum Exchange
Amount is exceeded at a particular Acceptance Priority Level, all
New Notes required to be issued and all Old Notes required to be
accepted in higher priority levels will be included. Old
Notes properly tendered (and not withdrawn) will be accepted by the
Issuers in the Exchange Offers in the following order and the
following amounts:
- First, all such tendered Priority Level 1 Notes will be
accepted;
- Second, with respect to such tendered Priority 2 Notes, all
such tendered Priority 2 Notes will be accepted unless doing so
would cause the Maximum Exchange Amount to be exceeded, in which
case such Priority 2 Notes will be accepted on a pro rata
basis, in the greatest aggregate principal amount practicable
that does not cause the Maximum Exchange Amount to be exceeded;
and
- Third, with respect to such tendered Priority 3 Notes, all such
tendered Priority 3 Notes will be accepted unless doing so would
cause the Maximum Exchange Amount to be exceeded, in which case
such Priority 3 Notes will be accepted on a pro rata basis, in the
greatest aggregate principal amount practicable that does not cause
the Maximum Exchange Amount to be exceeded.
The Issuers will pay accrued and unpaid interest on the Old
Notes exchanged for New Notes on the settlement date for the
Exchange Offer.
The Exchange Offers are not conditioned on a minimum principal
amount of outstanding Old Notes being tendered or the issuance of a
minimum principal amount of New Notes. However, the Exchange
Offer is subject to certain other conditions, as more fully
described in the Offering Memorandum.
In connection with the Exchange Offers, the Issuers will solicit
consents to amend the Old Notes and the indentures governing the
Old Notes (the "Old Notes Indentures"). The proposed amendments,
which require the consent of a majority in aggregate principal
amount of the outstanding Old Notes with respect to each series of
Old Notes, will eliminate or waive substantially all of the
restrictive covenants, eliminate certain events of default, modify
covenants regarding mergers and transfers of assets, and modify or
eliminate certain other provisions in the Old Notes
Indentures. The Issuers will not accept consents for the 2022
Notes or the 2023 Notes if less than the full amount of tendered
2022 Notes and 2023 Notes are accepted pursuant to the Exchange
Offers.
The New Notes will be issued pursuant to an indenture by and
among the Issuers, the guarantors and Wilmington Trust, National
Association, as trustee and collateral agent. The New Notes
will bear interest at a rate of 9.375% per annum, will mature on
May 1, 2024 and will be governed by
covenants that are substantially the same as the covenants
currently governing the Issuers' 8.00% Senior Secured Notes due
2025. The New Notes will be fully and unconditionally
guaranteed, jointly and severally, by each of the Issuers'
restricted subsidiary guarantors (including those obligated with
respect to certain indebtedness, including the Issuers' senior
reserve-based revolving credit facility), and such guarantees and
the New Notes will be secured by junior priority security interests
in the collateral that secures the Issuers' obligations under the
RBL Facility. On the issue date of the New Notes, the
collateral for the New Notes will include substantially all of the
acreage in the Issuer's core areas that it currently holds.
The New Notes will rank in seniority equal with any existing and
future senior indebtedness, as further described in the Offering
Memorandum. The liens securing the New Notes will rank pari
passu in priority with the Issuers' 8.00% senior secured notes due
2025. The terms of the New Notes will not permit incurrence
of additional secured debt that ranks pari passu in lien priority
in excess of $1,200 million, except
to the extent the amount of New Notes issued in the Exchange Offers
is increased.
General
The Issuers may terminate, withdraw or amend the Exchange Offers
and Consent Solicitations, either as a whole, or with respect to
one or more series of Old Notes, at any time and for any reason,
including based on the acceptance rate and outcome of the Exchange
Offers or if any of the conditions described in the Offering
Memorandum are not satisfied, subject to applicable law.
The issuance of the New Notes will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. The New Notes are being offered and issued
only (1) in the United States
to holders of the Old Notes that are "qualified institutional
buyers" as defined in Rule 144A under the Securities Act, and
(2) outside the United States
to holders of the Old Notes that are not U.S. persons in reliance
upon Regulation S under the Securities Act. Accordingly,
the New Notes will be subject to restrictions on transferability
and resale and may not be transferred or resold except as permitted
under the Securities Act and other applicable securities laws,
pursuant to registration or exemption therefrom.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering, solicitation or sale would be unlawful.
The offering documents will be distributed only to holders of
the Old Notes that complete and return a letter of eligibility
confirming that they are "Eligible Holders" for the purposes of the
Exchange Offers. D.F. King & Co., Inc. is acting as the
Information Agent for the Exchange Offers. Requests for the
offering documents from "Eligible Holders" may be directed to
D.F. King & Co., Inc. at
(212) 269-5550 (for brokers and banks) or (800) 207-3158 (for
all others).
Neither the Issuers, their respective boards nor any other
person makes any recommendation as to whether the holders of the
Old Notes should exchange their notes, and no one has been
authorized to make such a recommendation. Holders of the Old
Notes must make their own decisions as to whether to exchange their
notes, and if they decide to do so, the principal amount of the
notes to exchange.
About EP Energy LLC
The EP Energy team has a passion for finding and producing the
oil and natural gas that enriches people's lives. EP Energy
has a proven strategy, a significant reserve base, multi-year
drilling opportunities, and a strategic presence in a number of the
country's leading unconventional resource areas in North America. EP Energy is active in key
phases of the E&P value chain—acquiring, developing and
producing oil and natural gas. For more information about EP
Energy, visit epenergy.com.
Forward-Looking Statements
This release includes certain forward-looking statements and
projections of EP Energy. We have made every reasonable
effort to ensure that the information and assumptions on which
these statements and projections are based are current, reasonable,
and complete. However, a variety of factors could cause
actual results to differ materially from the projections,
anticipated results or other expectations expressed, including,
without limitation, the volatility of and sustained low oil,
natural gas and NGL prices; the supply and demand for oil, natural
gas and NGLs; the company's ability to meet production volume
targets; changes in commodity prices and basis differentials for
oil and natural gas; the uncertainty of estimating proved reserves
and unproved resources; the future level of service and capital
costs; the availability and cost of financing to fund future
exploration and production operations; the success of drilling
programs with regard to proved undeveloped reserves and unproved
resources; the company's ability to comply with the covenants in
various financing documents; the company's ability to obtain
necessary governmental approvals for proposed E&P projects and
to successfully construct and operate such projects; actions by the
credit rating agencies; credit and performance risk of our lenders,
trading counterparties, customers, vendors, suppliers and third
party operators; general economic and weather conditions in
geographic regions or markets served by the company, or where
operations of the company are located, including the risk of a
global recession and negative impact on oil and natural gas demand;
the uncertainties associated with governmental regulation,
including any potential changes in federal and state tax laws and
regulations; competition; and other factors described in the
company's Securities and Exchange Commission filings. While
the company makes these statements and projections in good faith,
neither the company nor its management can guarantee that
anticipated future results will be achieved. Reference must
be made to those filings for additional important factors that may
affect actual results. EP Energy assumes no obligation to
publicly update or revise any forward-looking statements made
herein or any other forward-looking statements made by EP Energy,
whether as a result of new information, future events, or
otherwise.
View original content with
multimedia:http://www.prnewswire.com/news-releases/ep-energy-announces-offers-to-exchange-new-senior-secured-notes-due-2024-for-outstanding-senior-notes-due-2020-2022-and-2023-300559887.html
SOURCE EP Energy LLC