Pacific Exploration Reaches Forbearance Deal With Certain Noteholders

By Carolyn King

Pacific Exploration & Production Corp. on Friday said it had reached a forbearance agreement with certain noteholders, giving the troubled Canadian-Colombian oil company more time to achieve a restructuring of its balance sheet.

The deal follows the company's decision not to make scheduled interest payments due on the notes last month and to seek restructuring alternatives. Analysts said that move was a possible sign the firm was running low on cash.

The company said Friday it had reached the agreement with holders of about 40% of its $4.1 billion in 5.375% senior notes due 2019 and of its 5.625% senior notes due 2025.

Washington, D.C.-based energy-investment firm EIG has made an offer to Pacific Exploration's noteholders, offering 16 cents on the U.S. dollar and saying it will overhaul the company's management and sell off assets if its offer to noteholders is successful.

"We are pleased to have worked with this group of significant creditors to obtain the forbearance until March 31, 2016. The extension should allow the company additional time to continue working with the Independent committee of the Board of Directors, the company's financial and legal advisers as well as its lenders and the noteholders to come to a consensual and comprehensive restructuring of the company's balance sheet," Pacific Chief Executive Ronald Pantin said in a statement.

Pacific, which is listed on the Toronto Stock Exchange but has most of its assets in Colombia, has been hit hard by falling oil prices and a lack of new discoveries. After trading around 34 Canadian dollars (about $25) in 2011, the company's shares recently changed hands at 71 Canadian cents.

The company said it would use the extension Period to continue to work with its creditors and "to formulate a comprehensive plan to address the current oil price environment and ensure the long-term viability of its business." It said it continues to operate normally.

Write to Carolyn King at carolyn.king@wsj.com

(END) Dow Jones Newswires

February 19, 2016 10:59 ET (15:59 GMT)

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