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Current PQ Stock Info

On January 14, 2015, PetroQuest Energy (ticker: PQ) took appropriate steps addressing its current $350 million senior unsecured 10% high-yield issue (CUSIP 716748AA6) due in September 2017.

PetroQuest will seek to offer to exchange up to $300 million of the $350 million 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, and (iii) 6,000,000 shares of its common stock.  The solicitation period runs from January 14 to February 11, 2016, unless extended by the company.

The top 10 public holders of the issue are:

Holder Name(1) Portfolio Name Position
New York Life Investment Mgmt LLC Multiple Portfolios 80,085
Franklin Advisers Inc. Franklin Income Fund 60,000
Hotchkiss & Wiley Capital Mgmt Multiple Portfolios 19,107
Prudential Financial Multiple Portfolios 9,600
Franklin Templeton Investment FTIF – Franklin Income Fund 5,000
Bruce & Company Bruce Fund 4,924
State Street Corp Multiple Portfolios 4,009
Pioneer Investment Management Multiple Portfolios 3,500
Morgan Stanley Invst Mgmt LTD Multiple Portfolios 3,220
SPAR Invest S.A. Multiple Portfolios 1,900
  • Source: Bloomberg, L.P.

On February 3, 2016, the company announced that approximately $214.4 million in aggregate principal amount of the Old Notes, representing 61% of the outstanding aggregate principal amount of Old Notes, had been validly tendered and the holders of such Old Notes had consented to the Indenture Amendments.

As of September 30, 2015, the company had $159 million of cash on its balance sheet and $0 drawn on its $55 million credit facility.

As part of the exchange process, the company entered into support agreements with certain institutional holders who have participated in recent exchange transactions in favor of the Exchange Offer and Consent Solicitation.

The New Bonds will be Secured, and thus senior to the unsecured Old Bonds.  Assuming the base case of 61% conversion, the face value of the new bonds outstanding will be $144.7 million, and the maturity date is moved out to 2021.  Net debt, subsequent to the 61% conversion, will be approximately $174.9 million and annual interest expense would decrease by almost $7 million.


Based on a multiple of production valuation methodology, PetroQuest shares could trade between $3.11 and $5.74 per share assuming the exchange offer is completed and shares trade in line with comparable peers.

With the this successful exchange of debt, cash on the books, reduced interest expense, and a large net risked inventory of low-risk drilling projects in East Texas and South Louisiana that with a right-sized 2016 CAPEX drilling program can keep production flat, PetroQuest is taking steps to move ahead rather than sitting stationary.

As Churchill said: “If you’re going through hell, keep moving.”

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