Each one in plain English, with the numbers worked through for a shareholder.
29 Feb 2012debt financing● NeutralMajor
Endeavour closed the $500 million 2018 notes offering on February 23, 2012 ($350 million 12% first priority due March 1, 2018 and $150 million 12% second priority due June 1, 2018), receiving net proceeds of about $460.5 million, held in escrow. Release depends on completing the North Sea acquisition and repaying the 15% term loan. If the acquisition is not completed by June 15, 2012, or the escrow release conditions are not met by then, all the notes are redeemed at 101% of issue price. After release they are secured by liens on 65% of the stock of the first-tier foreign subsidiary and certain intercompany loans.
Endeavour priced $500 million of 12% notes due 2018 ($350 million first priority and $150 million second priority), sold at 96% of par, with net proceeds of about $458.6 million. The money is meant to fund the pending North Sea acquisition and repay the 15% senior term loan due 2013, and is held in escrow until then. This replaces the bridge/unsecured note plan flagged earlier with a specific secured notes deal, and the notes carry a high 12% coupon.
Commonwealth Bank of Australia (the letter of credit lender) waived certain covenants, including minimum EBITDAX, and consented to up to $500 million of senior unsecured notes held in escrow, with express provisions to let the ConocoPhillips North Sea purchase proceed. If a senior secured facility is used to finance that purchase, Endeavour must replace the letter of credit facility with another one. The same filing furnished offering-memorandum material for a proposed senior notes offering due 2020: fourth-quarter 2011 production guidance of 4,000-4,500 BOE/d (ConocoPhillips assets 8,000-9,000 BOE/d), year-end 2011 proved reserves of 22.7 MMBOE (12.5 North Sea, 10.2 US), and a 2012 capital budget of $175-200 million. It also says the Marcellus purchase was not completed and the company is in litigation with the sellers, and includes financials for the ConocoPhillips assets.
Endeavour and the Cyan lenders amended the senior term loan, consenting to up to $500 million of senior unsecured notes and excluding them from certain financial covenants. The amendment also cuts the minimum EBITDAX requirement to $20 million for the periods ended December 31, 2011 and March 31, 2012, and delays the increase in the minimum PDP coverage ratio (from 0.25 to 0.50) until after March 31, 2012. The filing does not link this to the ConocoPhillips deal, but it fits with financing that purchase (an inference).
Endeavour agreed to buy ConocoPhillips' interests in three producing UK Central North Sea fields (Alba 23.43%, MacCulloch 40%, Nicol 18%) for $330 million, including about $94 million of tax attributes, with closing expected in the first half of 2012. This would lift its Alba stake to 25.68%, and it expects to take over as operator of MacCulloch, subject to partner agreement. Citigroup committed to a bridge loan of up to $500 million (less any reserve-based revolver of up to $100 million) that could fund the purchase and refinance the Cyan term loan. The Alba interest must clear approvals by March 31, 2012 or the whole agreement terminates without liability.
19 Dec 2011material agreement termination▼ BadMajor
Endeavour terminated its July 2011 agreement to buy Marcellus assets from SM Energy and others, effective December 14, 2011, because the closing conditions were not satisfied. This ends the Pennsylvania acquisition that the July 2011 convertible notes were meant to fund; the filing does not say what happens to the proceeds, though the July filing said they could go to general purposes or debt repayment if the deal failed.
Endeavour arranged a letter of credit facility with Commonwealth Bank of Australia for £20.6 million (about $35 million), securing decommissioning obligations on UK licences; it costs 4.5% a year and runs to October 31, 2013. In return, £20.6 million of restricted cash was freed for general corporate use, following through on the February 2011 amendment aimed at releasing restricted cash.
22 July 2011capital raising announcement● NeutralMajor
Endeavour closed the sale of $135 million of 5.5% convertible senior notes due July 15, 2016 (including a fully exercised $15 million extra allotment), with net proceeds of about $130.0 million. The notes convert at roughly $18.51 per share, so they could dilute shareholders if converted. The proceeds are to fund the pending Marcellus purchase, with the rest for general purposes; if that deal fails, the company intends to use them for general purposes, possibly including repaying debt. This continues the financing for the July 2011 Marcellus deal.
Endeavour agreed to buy about 50,000 net Marcellus acres and a 10.75-mile pipeline in Pennsylvania from SM Energy and others for about $110 million, to be funded mainly from a planned convertible notes offering; it can walk away if due diligence adjustments exceed 15% of the price. It also added $75 million to its Cyan senior term loan (about $237 million outstanding as of March 31, 2011 on that basis) for a fee of 5% of the increase, with quarterly amortization rising from $400,000 to $587,500. The lenders consented to the notes offering, and the money is meant to speed up development, including Greater Rochelle.
Endeavour redeemed all $81.25 million of its 6% senior notes due 2012 at face value plus accrued interest on April 20, 2011, using part of the proceeds from its recent stock offering. This resolves the open question of refinancing the 2012 notes that was linked to the Cyan loan's maturity.
Endeavour sold 10,000,000 new shares at $11.00 each ($10.34 net of underwriting discount) in a public offering led by Citigroup, and the underwriters took up their option for 1,500,000 more on March 26, so 11.5 million shares in total, closing March 30, 2011. This dilutes existing holders; the filing does not say how the proceeds will be used. It also bars the company from issuing more stock for 90 days without Citigroup's consent.
Endeavour and the holders of its 11.5% convertible bonds (Smedvig QIF) amended the deal: maturity moves from January 2014 to January 2016, and the holders' conditional put right (and the conversion price reset if it is not used) moves from January 2012 to January 2016. The interest rate drops to 7.5% from March 31, 2014. This resolves the January 2012 redemption-right open thread, which the Cyan loan maturity was tied to.
Endeavour amended its August 2010 Cyan Partners senior term loan to raise the amount reserved as security for letters of credit from $25 million to $35 million. The company says this should let it release about $32 million of restricted cash that is currently backing existing letters of credit, by using another letter of credit provider.
Endeavour's UK subsidiary agreed to buy an extra 20% working interest in the Bacchus development in the North Sea from Shell, for $9.57 million cash at closing plus $6.38 million three months after first oil (adjusted for capital Shell spends before closing). Closing is expected by the end of 2010, subject to government and partner approvals.
20 Oct 2010asset acquisition disposition● NeutralMajor
Endeavour completed the sale of its Cygnus asset to Bayerngas UK Ltd. for $110 million cash on October 19, 2010, finishing the deal announced in August. The filing does not say how the proceeds will be used.
Endeavour's UK subsidiary agreed to sell its interest in the Cygnus asset (UK licences P.1055 and P.1437) to Bayerngas for $110 million, subject to working capital adjustments, government and partner approvals, with closing expected within 60 days.
Endeavour's UK subsidiary took $150 million of term loans from lenders led by Cyan Partners (12% cash interest plus 3% paid in kind, due Aug 16, 2013 unless the 6% 2012 notes and the 11.5% bond redemption right are refinanced or extended, otherwise Oct 14, 2011). It used $66 million to repay and end the senior bank facility and the junior facility, and paid $18 million in upfront fees, of which $10.1 million bought about nine million new shares at $1.13 (8,999,999 shares), which dilutes existing holders. Substantially all assets are pledged as collateral, and the loan carries leverage and minimum EBITDAX covenants.
Endeavour closed a new $25 million junior facility with Bank of Scotland (maturing Feb 5, 2011, LIBOR+8%) via an amendment to the 2008 junior credit facility, and shortened the maturity of its $225 million senior bank facility to the earlier of Jan 31, 2011 or the reserve tail date, from Oct 31, 2011. Both facilities now come due in early 2011, so the company must refinance or repay them.
5 Feb 2010capital raising announcement● NeutralMajor
Endeavour sold 23,457,779 new common shares at $0.90 each in a private placement, mainly to existing stockholders and certain directors, for about $20.5 million net. The money is meant to partly fund the 2010 capital budget, and the company must file a resale registration within 60 days. Existing shareholders are diluted by the new shares.
What it means for a shareholder
23.5m new shares at $0.900 to raise about $20.5m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
Endeavour and its Series C preferred holders amended their registration rights agreement to correct a technical oversight, aligning the number of common shares reserved for conversion with the terms left after the November 2009 partial redemption. No new money or change in economic terms is described.
This amendment to the January 11 filing adds the purchase agreements and participation agreement as exhibits and restates the shale deals: $15 million cash for the Cohort acreage and about $8.0 million for the Alabama acreage. It says the initial cash came from existing cash reserves and future drilling is expected to be funded from cash balances, expanding credit capacity and potential capital market activity. It also mentions positions in Montana, which the earlier filing did not describe.
Endeavour entered new U.S. shale ventures: it bought 50% of Cohort Energy's interests in about 66,000 gross (27,000 net) acres in North Louisiana/East Texas and Western Pennsylvania for an initial $15 million, and 50% of Hillwood's interests in about 160,000 gross (63,000 net) acres in Alabama for an initial purchase price of about $7.5 million. Cohort and Hillwood will operate, and Endeavour will bear certain drilling and completion costs, with later costs expected to be shared 50/50. This is the company's first U.S. onshore position in this history, alongside its North Sea assets.
23 Nov 2009security holder rights change● NeutralMajor
Endeavour redeemed 60% of its Series C convertible preferred stock at a face value of $75 million, paying $25 million in cash and issuing $50 million of 10% subordinated notes (plus 2% capitalized), amortizing over four years from March 2011. The remaining Series C shares were amended: the dividend fell to 4.5% from 8.5%, the conversion price fell to $1.25 from $2.50, and anti-dilution protection was removed. The lower conversion price means the remaining preferred converts into more common shares, which could dilute common shareholders.
20 May 2009asset acquisition disposition● NeutralMajor
Endeavour completed the sale of its Norwegian subsidiary, Endeavour Energy Norge AS (which held the Norway interests in Brage, Njord and Agat), to Verbundnetz Gas AG for $150 million cash on May 14, 2009. It expects a gain of about $47 million after allocating $68 million of goodwill to the assets sold. This removes the Norwegian assets from the company's portfolio.
Endeavour signed an amended and restated employment agreement with chairman and CEO William Transier, extending his term to May 31, 2011. The filing says it makes technical changes for tax-rule compliance and that his pay was not changed.
28 Jan 2008capital raising announcement● NeutralMajor
The $40 million 11.5% convertible bond sale announced in December 2007 closed, with the Smedvig Family Office of Norway as investor (bonds bought via Smedvig QIF Plc), and the Smedvig family committed a further $60 million for future investments on terms to be set later. The bonds convert at an initial price stated as $2.36, and the company also borrowed $25 million under a new bank facility (LIBOR+3.5% in year one, LIBOR+5.5% after, due Oct 11, 2011). Together with existing cash these repaid the $75 million second lien term loan from the 2006 Talisman purchase, plus about $3.6 million of interest and fees; this resolves the open thread on the bond closing. Conversion into common stock could dilute shareholders.
Endeavour announced on December 26, 2007 an agreement to sell $40.0 million of 11.5% convertible bonds due 2014 to a qualified institutional investor. The bonds would be issued by a wholly owned Luxembourg subsidiary and guaranteed by the company, with closing planned for January 2008 subject to conditions. The company says it intends to use the proceeds to repay existing higher-cost debt. Conversion into common stock could dilute shareholders; the filing does not state the conversion price.
This amendment repeats the November 6 report on the Talisman Expro purchase and adds the second lien credit agreement, audited revenue and expense statements for the acquired properties and pro forma financial statements, which were left out of the first filing. The text changes the Bittern interest from 2.38% to 2.42%; the deal terms are otherwise unchanged.
