Denbury Announces Early Participation Results of Successful Exchange Offers for Subordinated Notes Due 2021 and 2022 and Seco...
June 17 2019 - 6:30AM
Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”)
today announced the early participation results of its exchange
offers to:
- Eligible Holders (as defined below) of its 6⅜% Senior
Subordinated Notes due 2021 (the “2021 Notes”) and its 5½% Senior
Subordinated Notes due 2022 (the “2022 Notes” and, together with
the 2021 Notes, the “Old Subordinated Notes”) (the “Subordinated
Notes Exchange Offers”); and
- Eligible Holders of its 7½% Senior Secured Second Lien Notes
due 2024 (the “Old Second Lien Notes” and, together with the Old
Subordinated Notes, the “Old Notes”) (the “Second Lien Notes
Exchange Offer” and, together with the Subordinated Notes Exchange
Offers, the “Exchange Offers”).
As of 5:00 p.m. New York City time, on June 14,
2019 (the “Early Participation Time”), Eligible Holders validly
tendered and did not validly withdraw approximately $107.5 million
aggregate principal amount of 2021 Notes, $173.3 million aggregate
principal amount of 2022 Notes and $257.3 million aggregate
principal amount of Old Second Lien Notes.
Pursuant to the terms and subject to the
conditions as set forth in the confidential offering memorandum
(the “Offering Memorandum”) and letter of transmittal (the “Letter
of Transmittal”), each dated June 3, 2019, the Company expects to
accept approximately (i) all $107.5 million validly tendered and
not validly withdrawn 2021 Notes and approximately $126.8 million
aggregate principal amount of 2022 Notes in the Subordinated Notes
Exchange Offers, resulting in an approximate acceptance proration
factor of 73.1% for the 2022 Notes, in exchange for approximately
$71.5 million in cash, $66.0 million aggregate principal amount of
new 7¾% Second Lien Notes due 2024 (the “New Second Lien Notes”)
and $96.5 million aggregate principal amount of new 6⅜% Convertible
Senior Notes due 2024 (the “New Convertible Senior Notes”) and (ii)
all $257.3 million validly tendered and not validly withdrawn Old
Second Lien Notes in the Second Lien Notes Exchange Offer in
exchange for approximately $257.3 million aggregate principal
amount of New Second Lien Notes.
Note: All amounts are rounded to the
nearest $100,000.
Combining the private exchange agreements with
certain institutional investors previously announced on June 3,
2019 (the “Private Exchanges”) with the early participation results
of the Exchange Offers described above, the Company expects to
accept exchanges of a total of approximately $152.2 million
aggregate principal amount of 2021 Notes, $219.9 million aggregate
principal amount of 2022 Notes, $96.3 million aggregate principal
amount of the Company’s 4⅝% Senior Subordinated Notes due 2023 and
$425.4 million aggregate principal amount of Old Second Lien Notes
in exchange for a total of approximately $120.0 million of cash,
$528.0 million aggregate principal amount of New Second Lien Notes
and $245.5 million aggregate principal amount of New Convertible
Senior Notes, as reflected in the table below. The Company
currently expects to settle the early participation Exchange Offers
and Private Exchanges on Wednesday, June 19, 2019 (the “Initial
Settlement Date”).
Amounts
in millions |
|
Principal Amount Outstanding as of March 31,
2019 |
|
Principal to be Exchanged,Excluding
Cash |
|
Pro Forma Principal Amount Outstanding as
ofInitial Settlement Date |
Old Notes
Exchanged |
|
|
|
|
|
|
|
|
|
|
|
|
6⅜% Senior Subordinated Notes due 2021 |
|
|
$ |
203.5 |
|
|
|
|
$ |
(152.2 |
) |
|
|
|
$ |
51.3 |
|
|
5½% Senior Subordinated Notes due 2022 |
|
|
314.7 |
|
|
|
|
(219.9 |
) |
|
|
|
94.8 |
|
|
4⅝% Senior Subordinated Notes due 2023 |
|
|
308.0 |
|
|
|
|
(96.3 |
) |
|
|
|
211.7 |
|
|
7½% Senior Secured Second Lien Notes due 2024 |
|
|
450.0 |
|
|
|
|
(425.4 |
) |
|
|
|
24.6 |
|
|
New Notes
Issued |
|
|
|
|
|
|
|
|
|
|
|
|
7¾% Senior Secured Second Lien Notes due 2024 |
|
|
— |
|
|
|
|
528.0 |
|
|
|
|
528.0 |
|
|
6⅜% Convertible Senior Notes due 2024 |
|
|
— |
|
|
|
|
245.5 |
|
|
|
|
245.5 |
|
|
Total (1) (2) |
|
|
$ |
1,276.2 |
|
|
|
|
$ |
(120.3 |
) |
|
|
|
$ |
1,155.9 |
|
|
(1) Total debt principal balances in the
table above reflect only those issuances impacted in the recent
exchange transactions and are not intended to reflect the Company’s
total debt principal outstanding.(2) The Company will pay a
total of approximately $120.0 million of cash to participants in
the exchange.
The Company does not expect to accept for
exchange any Old Subordinated Notes that are validly tendered after
the Early Participation Time but before 11:59 p.m. New York City
time, on June 28, 2019 (the “Expiration Time”). Withdrawal
rights expired at 5:00 p.m., New York City time, on June 14,
2019. Accordingly, Eligible Holders who have previously
tendered their Old Notes can no longer validly withdraw those Old
Notes from the Exchange Offers. Eligible Holders of Old
Second Lien Notes that validly tender their Old Second Lien Notes
after the Early Participation Time but before the Expiration Time
and are accepted will receive $950 aggregate principal amount of
New Second Lien Notes for each $1,000 principal amount of Old
Second Lien Notes. The final settlement date, if necessary,
for the Exchange Offers is currently expected to occur on or about
July 2, 2019 (the “Final Settlement Date” and, together with the
Initial Settlement Date, the “Settlement Dates”).
Eligible Holders of Old Notes accepted for
exchange in the Exchange Offers will receive accrued and unpaid
interest on such Old Notes in cash from the applicable last
interest payment date to, but not including, the applicable
Settlement Date.
The New Notes have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the
“Securities Act”), or under any state securities laws and will be
issued pursuant to an exemption therefrom, and may not be offered
or sold within the United States, or to or for the account or
benefit of any U.S. Person, absent registration or an applicable
exemption from registration requirements.
Documents relating to the Exchange Offers will
be distributed only to holders of Old Notes who complete and return
an eligibility form confirming that they are either a “qualified
institutional buyer” under Rule 144A or not a “U.S. person” under
Regulation S as defined under applicable securities laws (the
“Eligible Holders”). The complete terms and conditions of the
Exchange Offers, as well as the terms of the New Notes, are
described in the Offering Memorandum and Letter of Transmittal.
In order to receive a copy of the Offering
Memorandum, Eligible Holders must complete and submit an
eligibility form. The eligibility form may be obtained by
visiting www.dfking.com/dnr or by contacting D.F. King & Co.,
Inc., the exchange agent and information agent in connection with
the Exchange Offers, by calling (800) 399-1581 (toll free) or (212)
269-5550 (banks and brokers) or by emailing denbury@dfking.com.
This press release does not constitute an offer
to sell or a solicitation of any offer to buy any securities, nor
shall there be any sale of any securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
jurisdiction. This press release is being issued pursuant to
Rule 135c under the Securities Act.
This press release contains forward-looking
statements that involve risks and uncertainties that are based on
assumptions that management believes are reasonable based on
currently available information. There is no assurance that
these assumptions will prove to be correct. In addition, any
forward-looking statements represent the Company’s estimates only
as of today and should not be relied upon as representing its
estimates as of any future date. Denbury assumes no
obligation to update its forward-looking statements.
Denbury is an independent oil and natural gas
company with operations focused in two key operating areas: the
Gulf Coast and Rocky Mountain regions. The Company’s goal is
to increase the value of its properties through a combination of
exploitation, drilling and proven engineering extraction practices,
with the most significant emphasis relating to CO2 enhanced oil
recovery operations.
DENBURY CONTACTS:
Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000
John Mayer, Director of Investor Relations, 972.673.2383
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