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News & Press Releases

 

 

Talos Announces Successful Receipt of Requisite Consents and Collateral Release Requisite Consents Relating to Stone Energy Corporation's Senior Notes and Expiration of the Early Deadline

 

Houston, TX, April 3, 2018 — Talos Production LLC and Talos Production Finance Inc. (together, "Talos Production”), announced today that Stone Energy Corporation ("Stone Energy”) has received the Requisite Consents (as defined below) to amend certain terms of the indenture governing the 7.500% Senior Secured Notes due 2022 (the "Stone Notes”) and the collateral release requisite consents to release the collateral securing the Stone Notes, in each case, in connection with the previously announced Exchange Offer and Consent Solicitation (each as defined below).  The amendments and release of collateral, which will not become operative until the tendered Stone Notes are accepted for exchange by Talos Production, will amend 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.    

As previously announced, on March 20, 2018, Talos Production launched an offer to exchange (the "Exchange Offer”) any and all of the validly tendered and accepted outstanding 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 solicited the consent of the holders of the Stone Notes (the "Consent Solicitation”) to certain proposed amendments to the Stone Notes Indenture and a release of the collateral securing the Stone Notes.

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.  

As of 5:00 p.m., New York City time, on April 2, 2018, Talos Production has been advised by Global Bondholder Services Corporation, as the exchange agent and information agent for the Exchange Offer and Consent Solicitation, that Stone Notes were validly tendered and not withdrawn, and consents were delivered and not revoked, in respect of approximately $75,300,000 in aggregate principal amount, or approximately 86%, of the outstanding approximately $87,500,000 aggregate principal amount of Stone Notes held by non-controlling persons of Stone Energy, who were entitled to provide their consents in the Consent Solicitation pursuant to the terms of the Stone Notes Indenture.  As a result, the Requisite Consent and collateral release requisite consent of holders of the Stone Notes were obtained, and Stone Energy, Stone Energy Offshore, L.L.C. and The Bank of New York Mellon Trust Company, N.A., as trustee under the Stone Notes Indenture, entered into the supplemental indentures described in the Offer Materials.  The supplemental indentures became effective upon execution thereof, but the amendments to the Stone Notes Indenture will not become operative until the tendered Stone Notes are accepted for exchange by Talos Production. 

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. 

Expiration of Early Deadline

As previously announced, 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 Early Deadline expired at 5:00 p.m., New York City time, on April 2, 2018.  As previously announced, tenders of Stone Notes may not be withdrawn after 5:00 p.m., New York City time, on April 2, 2018, except to the extent Talos Production, as it determines necessary or to the extent required by law, provides additional withdrawal rights.  

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.  

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.


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