EPL Provides Financial and Management Update
16 Marzo 2009 - 1:30PM
Business Wire
Energy Partners, Ltd. (�EPL� or the �Company�) (NYSE:EPL)
announced today that it was notified by the administrative agent
for its bank lending group that the semi-annual re-determination of
the borrowing base under its revolving credit facility was
performed, resulting in a new borrowing base of $45 million, down
from the prior borrowing base of $150 million. The Company
currently has $83 million drawn under this facility, which results
in a borrowing base deficiency of $38 million. The Company has been
in discussions with the bank lender group about potential financial
and other covenant breaches that are likely to occur during 2009
under its revolving credit facility.
The Company, along with its recently retained financial advisor,
Parkman Whaling LLC, are discussing with the bank lender group the
Company�s options to remedy the borrowing base deficiency, as
permitted under the credit agreement, as well as discussing
amendments to the agreement to provide waivers of compliance with
financial and other covenants.
Management anticipates that the report of KPMG LLP, the
Company�s independent public accountants, relative to the Company�s
2008 consolidated financial statements will contain an explanatory
paragraph indicating substantial doubt about the Company�s ability
to continue as a going concern.
The Company also announced several management and governance
changes today. First, the Company announced today that its Chairman
and Chief Executive Officer, Richard A. Bachmann, has resigned with
immediate effect from all of his positions with the Company and its
subsidiaries and has stepped down as a member of the Board of
Directors (the �Board�).
Second, the Company announced that, as part of its previously
announced exploration of strategic alternatives, it has been
engaging in discussions with an Ad Hoc Committee representing the
holders of a majority of its $450 million principal amount of
senior unsecured notes. The Board has formed a Restructuring
Committee of the Board, consisting of Jerry Carlisle, Jim Latimer
and Bryant Patton, each of whom is an independent member of the
Board. The Board has instructed the Restructuring Committee to
negotiate with the Ad Hoc Committee regarding the terms of a
possible debt for equity exchange that is in the best interest of
the Company and acceptable to the senior unsecured noteholders.
Third, the Company announced that it has engaged Alan Bell as
the Company�s Chief Restructuring Officer. Until his retirement in
June�2006, Mr. Bell was the director of Ernst & Young LLP�s
energy practice in the Southwest U.S. area. Mr.�Bell earned a
master�s degree in business from Tulane University and a bachelor�s
degree in petroleum engineering from the Colorado School of Mines,
and is a certified public accountant licensed in Texas. Mr. Bell
will report to the Board.
Founded in 1998, EPL is an independent oil and natural gas
exploration and production company based in New Orleans, Louisiana.
The Company�s operations are focused along the U. S. Gulf Coast,
both onshore in south Louisiana and offshore in the Gulf of
Mexico.
Forward-Looking Statements
This press release may contain forward-looking information and
statements regarding EPL. Any statements included in this press
release that address activities, events or developments that EPL
expects, believes, plans, projects, estimates or anticipates will
or may occur in the future are forward-looking statements. We
believe these judgments are reasonable, but actual results may
differ materially due to a variety of important factors. Among
other items, such factors might include:
- availability of capital to fund
required payments on our revolving credit facility, senior
unsecured notes and our working capital needs;
- our ability to execute the
strategic alternatives we are exploring;
- our ability to maintain adequate
liquidity and financing sources and an appropriate level of
debt;
- our ability to continue as a
going concern;
- discussions with our bank lender
group, our bondholders, our other creditors and the Minerals
Management Service;
- our inability to fulfill the
terms or meet the required financial covenants under our revolving
credit facility;
- changes in general economic
conditions;
- uncertainties in reserve and
production estimates;
- unanticipated recovery or
production problems;
- unanticipated results from wells
being drilled or completed;
- the effects of delays in
completion of gas gathering systems, pipelines and processing
facilities;
- oil and natural gas prices and
competition;
- the impact of derivative
positions;
- production expense
estimates;
- cash flow estimates;
- loss of key personnel;
- future financial
performance;
- planned capital expenditures;
and
- other matters that are discussed
in EPL's filings with the Securities and Exchange Commission.
These statements are based on current expectations and
projections about future events and involve known and unknown
risks, uncertainties, and other factors that may cause actual
results and performance to be materially different from any future
results or performance expressed or implied by these
forward-looking statements. Please refer to EPL's filings with the
SEC, including Form 10-K for the year ended December 31, 2007, Form
10-Q for the quarter ended September 30, 2008 and current reports
on Form 8-K, for a discussion of these risks.
Additional Information and Where to Find It. Security holders
may obtain information regarding the Company from EPL's website at
www.eplweb.com, from the Securities and Exchange Commission's
website at www.sec.gov, or by directing a request to: Energy
Partners, Ltd. 201 St. Charles Avenue, Suite 3400, New Orleans,
Louisiana 70170, Attn: Secretary, (504) 569-1875.
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