HOUSTON, Dec. 13, 2017 /PRNewswire/ -- EP Energy LLC
("EP Energy"), a wholly-owned subsidiary of EP Energy Corporation
(NYSE: EPE), announced that it and its wholly-owned subsidiary,
Everest Acquisition Finance Inc., as co-issuer (together with EP
Energy, the "Issuers"), have amended certain terms of the
previously-announced exchange offers (the "Exchange Offers") and
consent solicitations (the "Consent Solicitations") that they
launched on November 20, 2017 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"). The Issuers have negotiated
these terms with a steering committee of holders of the 2020 Notes
represented by Akin Gump Strauss Hauer & Feld LLP.
Members of the steering committee have indicated that such
terms are acceptable to them.
The Issuers also announced that they have extended the early
tender time for the Exchange Offers and Consent Solicitations to
5:00 p.m., New York City time, on December 19, 2017 (the "Early Tender Time") and
the expiration time for the Exchange Offers and Consent
Solicitations to 5:00 p.m.,
New York City time, on
December 28, 2017. Holders of the Old
Notes that validly tender their Old Notes prior to the Early Tender
Time will be entitled to the previously-announced terms and
conditions of the Exchange Offers and Consent Solicitations, except
as set forth herein and in the Supplement No. 1, dated
December 13, 2017 (the "Offering Memorandum Supplement"), to
the Confidential Offering Memorandum and Consent Solicitation
Statement, dated November 20, 2017
(the "Offering Memorandum").
As part of the amendments, the Issuers increased the total
consideration payable to holders of 9.375% Senior Notes due 2020
("2020 Notes") to (i) $50.00 in cash
and (ii) $1,000 of New Notes, per
$1,000 principal amount of 2020 Notes
validly tendered and not withdrawn prior to the Early Tender
Time. In addition, the Issuers agreed to significant
improvements to the terms of the New Notes as described further
below.
The Old Notes and other information relating to the Exchange
Offers are set forth below. As of 5:00
p.m., New York City time,
on December 13, 2017, the principal amount of Old Notes
validly tendered and not validly withdrawn was $44,482,000 with respect to the 2020 Notes,
$9,864,000 with respect to the 7.750%
Senior Notes due 2022 ("2022 Notes") and $76,721,000 with respect to the 6.375% Senior
Notes due 2023 ("2023 Notes").
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|
|
|
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 and $50.00 in cash
|
$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 $1,400.0
million based on demand in the Exchange Offers.
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|
|
(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").
|
The Issuers have also amended the terms of the New Notes being
offered in the Exchange Offers to: (i) provide for optional
redemptions prior to May 1, 2020 at a
redemption price equal to 100% of principal amount plus the
applicable "make-whole" premium (calculated based on present value
of the redemption price at May 1,
2020 using a discount rate equal to the treasury rate plus
50 basis points), (ii) provide for optional redemptions at
redemption prices of 107.031%, 104.688%, 102.344% and 100.000% for
redemptions during the 12-month periods commencing May 1, 2020, 2021, 2022 and 2023 and thereafter,
respectively, (iii) reduce the amount of New Notes that can be
redeemed with net cash proceeds from equity offerings from 50% to
35%, (iv) prohibit subsidiary guarantees and collateral from being
released or terminated automatically solely due to a release or
termination under other indebtedness, (v) set an aggregate
incurrence cap of $2,400 million for
indebtedness that is secured by liens on collateral that are pari
passu with liens on collateral securing the New Notes, (vi) revise
the definition of "RBL Facility" to refer to a facility with
commercial bank lenders and a borrowing base determined in
accordance with customary oil and gas lending criteria, (vii) make
the prepayment of any outstanding Old Notes more than one year
prior to maturity a restricted payment, with exceptions permitting
the refinancing of such Old Notes with unsecured indebtedness or
secured indebtedness that is secured by liens on collateral that
are junior to or pari passu with liens on collateral securing the
New Notes, (viii) calculate "Cumulative Credit" from October 1, 2017 rather than July 1, 2012 and "Excluded Contributions" from
the issue date of the New Notes rather than the issue date of the
2020 Notes and (ix) place a $500
million sublimit on aggregate amounts outstanding after the
issue date under the following Investment and Restricted Payment
baskets and carve-outs: investments in unrestricted subsidiaries,
general investments, investments in similar businesses, general
restricted payments, distribution of stock of unrestricted
subsidiaries and annual dividend basket up to 6% of market
capitalization. The amended terms of the New Notes are
described in more detail in the Offering Memorandum Supplement.
Except as set forth herein and in the Offering Memorandum
Supplement, the complete terms and conditions of the Exchange
Offers and Consent Solicitations remain the same as set forth and
detailed in the Offering Memorandum, copies of which were
previously distributed to eligible holders of the Old Notes.
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.
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SOURCE EP Energy LLC