HOUSTON, March 15, 2016 (GLOBE NEWSWIRE) -- Energy XXI (NASDAQ:EXXI) today announced that it has made the interest payment due on its EPL Oil and Gas, Inc. 8.25% Senior Notes. This follows the Company’s decision to defer this interest payment originally due on February 16, 2016, commencing a 30-day grace period.
As previously announced, the Company continues to work with its financial and legal advisors to analyze a variety of solutions to reduce its overall financial leverage, while maintaining primary focus on preserving liquidity. As part of this process, Energy XXI continues to engage in discussions with its debtholders and other stakeholders to develop and implement a comprehensive plan to restructure its balance sheet. Operations are continuing as normal while these discussions are ongoing.
As Energy XXI continues these discussions, the Company has elected not to make interest payments due on Energy XXI Gulf Coast, Inc.’s (“EGC”) outstanding 11% Senior Secured 2nd Lien Notes and EGC’s outstanding 6.875% Senior Notes due on March 15, 2016, commencing a new 30-day grace period. The decision not to make these interest payments does not constitute an event of default; however, if the Company does not make the interest payments or restructure the debt before the grace period expires, the holders of the notes could accelerate amounts due under the notes and a default and acceleration under the Company’s other debt instruments could also occur.
In addition, the Company has obtained an extension on the waiver to certain requirements under its Second Amended and Restated First Lien Credit Agreement (provided pursuant to the Thirteenth Amendment and Waiver dated February 29, 2016) until April 15, 2016, unless terminated earlier pursuant to the terms of the waiver. In conjunction with the waiver, the Company has agreed to reduce its borrowing base from $500 million to $377.7 million and unwind certain hedging transactions and use the proceeds therefrom to repay amounts of outstanding loans to EPL under the Credit Agreement, with the repayments resulting in a further reduction in the borrowing base of EGC and EPL. The full details of the waiver agreement have been filed on form 8-K with the Securities and Exchange Commission.
PJT Partners LP is serving as Energy XXI’s financial advisor and Vinson & Elkins L.L.P. is serving as its legal advisor.
All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions. It is not possible to predict or identify all such factors and the following list should not be considered a complete statement of all potential risks and uncertainties. Certain risks and uncertainties include the current depressed commodity pricing environment affecting the oil and gas industry, whether Energy XXI is able to successfully restructure its indebtedness, improve its short- and long-term liquidity position or complete any strategic transactions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. For a more detailed discussion of risk factors, please see Part I, Item 1A, "Risk Factors" of our most recent Annual Report on Form 10-K and Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the period ended December 31, 2015 for more information. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.
About the Company
Energy XXI is an independent oil and natural gas development and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The Company's properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. To learn more, visit the Energy XXI website at www.EnergyXXI.com.
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