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PetroQuest Energy, Inc. (PQ) announced today the early participation results of its previously announced private exchange offer (the “Exchange Offer”) to Eligible Holders (as defined below) for up to $300 million aggregate principal amount (the “Maximum Exchange Amount”) of its outstanding 10% Senior Notes due 2017 (CUSIP No. 716748 AA6) (the “Old Notes”) for up to (i) $75 million of cash, (ii) $202.5 million aggregate principal amount of its newly issued 10% Second Lien Senior Secured Notes due 2021 (the “New Notes”), and (iii) 6,000,000 shares of its common stock (the “Shares”), and related consent solicitation (the “Consent Solicitation”) to adopt certain amendments and waivers to the indenture governing the Old Notes (the “Indenture Amendments”).

As of 5:00 p.m., New York City time, on January 28, 2016 (the “Initial Early Tender Date”), more than a majority of the outstanding aggregate principal amount of the Old Notes had been validly tendered (and not validly withdrawn) and the holders of such Old Notes had consented to the Indenture Amendments. PetroQuest has therefore received the requisite number of consents to adopt the Indenture Amendments with respect to the Old Notes.  PetroQuest intends to execute a supplemental indenture (the “Supplemental Indenture”) to the indenture governing the Old Notes to implement the Indenture Amendments.

PetroQuest also announced today that it has extended the Initial Early Tender Date to 5:00 p.m., New York City time, on February 2, 2016 (as extended, the “Early Tender Date”). All other terms of the Exchange Offer and Consent Solicitation, as previously announced, will remain unchanged.

Withdrawal rights expired on January 28, 2016 at 5:00 p.m. New York City time. Accordingly, Eligible Holders who have previously tendered their Old Notes can no longer validly withdraw those notes from the Exchange Offer and Consent Solicitation, except to the extent required by law.

Any Old Notes not tendered and exchanged for cash, New Notes and Shares pursuant to the Exchange Offer prior to 11:59 p.m., New York City time, on February 11, 2016, unless extended, will remain outstanding and the holders will be subject to the terms of the Supplemental Indenture.

For each $1,000 principal amount of Old Notes, Eligible Holders will be eligible to receive the “Total Exchange Consideration” set forth in the table below, which includes the “Early Tender Premium.” For each $1,000 in principal amount of the Old Notes, up to the Maximum Exchange Amount, validly tendered after the Early Tender Date, Eligible Holders will be eligible to receive only the “Exchange Consideration” set forth in the table below.

The following table sets forth the exchange consideration for the Old Notes:

 

Title/CUSIP Number of Old Notes

Maturity Date

Aggregate Principal Amount Outstanding

Exchange Consideration(1)

Early Tender Premium(1)

Total Exchange Consideration(1)(2)

10% Senior Notes due 2017 / 716748 AA6

September 1, 2017

$350 million

$250 of cash, $652.50 principal amount of New Notes, 20 Shares of Common Stock

$22.50 principal amount of New Notes

$250 of cash, $675 principal amount of New Notes, 20 Shares of Common Stock

___________________
(1)  For each $1,000 principal amount of Old Notes accepted for exchange.
(2)  Includes Early Tender Premium.

 

The Exchange Offer and Consent Solicitation is being made upon the terms and subject to the conditions set forth in the Confidential Offering Memorandum and Consent Solicitation Statement (the “Offering Memorandum”) and related letter of transmittal and consent (the “Letter of Transmittal”), each dated January 14, 2016.

The closing of the Exchange Offer and Consent Solicitation is subject to, and conditioned upon, the satisfaction or waiver of conditions set out in the Offering Memorandum and Letter of Transmittal, subject to PetroQuest’s right to amend or terminate the Exchange Offer and Consent Solicitation prior to 11:59 p.m., New York City time, on February 11, 2016, unless extended.  The Indenture Amendments will not become operative until PetroQuest has accepted for exchange at least a majority in aggregate principal amount of the outstanding Old Notes pursuant to the terms of the Exchange Offer and Consent Solicitation, which is expected to occur on the settlement date, or February 17, 2016.

The New Notes and the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or with any securities regulatory authority of any State or other jurisdiction. The New Notes and the Shares may not be offered or sold in the United States or to or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offer will be made, and the New Notes and the Shares are being offered and will be issued, only to holders of Old Notes (1) in the United States, who are “qualified institutional buyers” as defined in Rule 144A under the Securities Act (“QIBs”), in a private transaction in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof and (2) outside the United States, who are persons other than U.S. persons as defined in Rule 902 under the Securities Act in offshore transactions in compliance with Regulation S under the Securities Act. The complete terms and conditions of the Exchange Offer and Consent Solicitation, as well as the terms of the New Notes and the Shares, are described in the Offering Memorandum and Letter of Transmittal, copies of which may be obtained by “Eligible Holders” by contacting D.F. King & Co., Inc., the information agent for the Exchange Offer and Consent Solicitation, at 48 Wall Street, 22nd Floor, New York, New York 10005,  212) 269-5550 (collect) or (866) 620-0678 (toll free) or via the following website: http://www.dfking.com/petroquest.

This news release does not constitute an offer to purchase the New Notes or the Shares or a solicitation of consents to amend the indenture governing the Old Notes. The Exchange Offer and Consent Solicitation is made solely pursuant to the Offering Memorandum and Letter of Transmittal. The Exchange Offer and Consent Solicitation is not being made to holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in Texas, Oklahoma, Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest’s common stock trades on the New York Stock Exchange under the ticker PQ.