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News & Press Releases

 

 

Talos Announces Offer to Exchange Any and All Outstanding Stone energy Notes and Solicitation Of Consents to Amend the Related Indenture

 

Houston, TX, March 20, 2018 — Talos Production LLC and Talos Production Finance Inc. (together, "Talos Production”), announced today that Talos Production has launched an offer to exchange (the "Exchange Offer”) any and all of Stone Energy Corporation’s ("Stone Energy”) validly tendered and accepted outstanding 7.500% Senior Secured Notes due 2022 (the "Stone Notes”) that are held by eligible holders for new 11.00% Second-Priority Senior Secured Notes due 2022 (the "Exchange Notes”).  In conjunction with the Exchange Offer, Talos Production is soliciting the consent of the holders of the Stone Notes (the "Consent Solicitation”) to certain proposed amendments (the "Proposed Amendments”) to the indenture governing the Stone Notes (the "Stone Notes Indenture”) to, among other things, eliminate or modify substantially all of the restrictive covenants, certain reporting obligations, certain events of default and related provisions contained in the Stone Notes Indenture and to release the collateral securing the Stone Notes.  Holders may not tender their Stone Notes for exchange without delivering their consents, and holders may not deliver their consents without tendering their Stone Notes for exchange.

The Exchange Offer and Consent Solicitation are being conducted in connection with the previously announced transaction agreement, pursuant to which, among other things, Stone Energy and Talos Energy LLC have agreed to combine in an all-stock transaction (the "Transactions”).  The Exchange Offer and Consent Solicitation are conditioned upon, among other things, (i) the closing of the Transactions, (ii) receipt of consents from holders of the Stone Notes representing at least a majority of the aggregate principal amount of the Stone Notes then outstanding (excluding consents from Stone Energy or any of its affiliates) (the "Requisite Consents”) and (iii) other customary conditions precedent.  The completion of the Exchange Offer and Consent Solicitation are conditions to the consummation of the Transactions.  The Transactions are expected to be completed in the second quarter of 2018.

Exchange Offer 

The consideration for Stone Notes validly tendered for exchange in the Exchange Offer prior to 5:00 p.m., New York City time, on April 2, 2018 (the "Early Deadline”), and not validly withdrawn prior to the Early Deadline, will be (i) $1,000 principal amount of Exchange Notes for each $1,000 principal amount of Stone Notes, which includes an early exchange premium of $30.00 principal amount of Exchange Notes per $1,000 principal amount of Stone Notes so tendered for exchange and (ii) a cash payment of $23.70 per $1,000 principal amount of Stone Notes so tendered for exchange.  The consideration for Stone Notes validly tendered for exchange in the Exchange Offer after the Early Deadline but prior to 12:00 midnight, New York City time, at the end of April 16, 2018 (the "Expiration Time”), will be (i) $970 principal amount of Exchange Notes per $1,000 principal amount of Stone Notes so tendered for exchange and (ii) a cash payment of $23.70 per $1,000 principal amount of Stone Notes so tendered for exchange.  

The Exchange Offer and Consent Solicitation are being made pursuant to an Offer to Exchange and Consent Solicitation Statement dated March 20, 2018 and a related Letter of Transmittal and Consent dated March 20, 2018 (together, the "Offer Materials”), which set forth a more detailed description of the Exchange Offer and Consent Solicitation.  Holders of the Stone Notes are urged to carefully read the Offer Materials before making any decision with respect to the Exchange Offer and Consent Solicitation.  

The offer and sale of Exchange Notes will not be registered under the Securities Act of 1933, as amended (the "Securities Act”), or the securities laws of any state or any other jurisdiction and the Exchange Notes may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws and foreign securities laws.

The following table summarizes important information relating to the Stone Notes, the Exchange Notes and the Exchange Offer. Tenders of the Exchange Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on April 2, 2018 (the "Withdrawal Deadline”) but not thereafter, except to the extent Talos Production, as it determines necessary or to the extent required by law, provides additional withdrawal rights. 

 

 

 

 

 

 

Consideration per $1,000
Principal Amount of 
Stone Notes Tendered

 

 

 

 

 

Total Consideration if Tendered Prior to the Early Deadline

Exchange Consideration if Tendered at or after the Early Deadline

CUSIP No.

Outstanding Principal Amount

Title of Stone Notes to be Tendered

Title of Exchange Notes to be Issued

 

Principal 
Amount of 
Exchange Notes

 

Cash Payment

 

Principal 
Amount of 
Exchange  Notes

 

Cash Payment

861642AQ9

$225,000,000

7.500% Senior Secured Notes due 2022 of Stone Energy Corporation

11.00% Second-Priority Senior Secured Notes due 2022 of Talos Production LLC and Talos Production Finance Inc. 

$1,000

$23.70

$970

$23.70

General

The Exchange Offer and Consent Solicitation may be terminated or withdrawn at any time and for any reason, including if certain conditions described in the Offer Materials, including, the satisfaction or waiver of all conditions precedent to the closing of the Transactions and the receipt of the Requisite Consents, are not satisfied, subject to applicable law.

This announcement does not constitute a solicitation of any consent in respect of, or an offer to purchase, or a solicitation of an offer to sell, any securities.  The Exchange Offer and Consent Solicitation are being made only pursuant to the Offer Materials.  The Offer Materials for the Exchange Offer will be distributed to all eligible holders of the Stone Notes who complete the eligibility form available at http://gbsc-usa.com/eligibility/talos.  Global Bondholder Services Corporation is acting as exchange and information agent for the Exchange Offer and Consent Solicitation.  Requests for the Offer Materials may be directed to Global Bondholder Services Corporation at (212) 430-3774 (for brokers and banks) or (866) 470-3700 (for all others) or e-mail at contact@gbsc-usa.com.

Conference Call 

Talos Production has scheduled a conference call at 1:00 EDT on Thursday, March 22 to share information on the Exchange Offer.  Those holders of Stone notes interested in listening to the call are invited to dial (800) 288-8974 or (612) 288-0329 if calling internationally.  Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 446522 when prompted.  Materials for the call are available on Talos Productions’s website at http://www.talosenergyllc.com/.  

About Talos Production

Talos Production is a technically driven, independent oil and gas exploration and production company with operations in the United States Gulf of Mexico and in the shallow waters off the coast of Mexico. Talos Production’s expertise in the United States Gulf of Mexico is based on exploring, acquiring, exploiting and developing primarily Deepwater assets near existing infrastructure. The shallow waters off the coast of Mexico provide Talos with high impact exploration opportunities in an emerging basin.

Forward-Looking Statements 

This press release contains forward-looking statements within the meaning of applicable federal securities laws.  The forward-looking statements include, without limitation, statements concerning the Exchange Offer and Consent Solicitation.  Forward-looking statements involve risks and uncertainties, including but not limited to economic, competitive, and technological factors outside Talos Production’s control that may cause actual results to differ materially from the forward-looking statements.  You should not place undue reliance on forward-looking statements as a prediction of actual results.  Talos Production expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

PRESENTATION


Talos Noteholder Exchange Offer

CONTACT: INQUIRIES TO THE COMPANY

investor@talosenergyllc.com

713-328-3000