TALOS PETROLEUM LLC

TALOS PETROLEUM LLC's exchange filed to remove a class of its securities from listing.

listing compliance notice

TALOS PETROLEUM LLC terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

TALOS PETROLEUM LLC's exchange filed to remove a class of its securities from listing.

listing compliance notice

The Talos combination closed on May 10, 2018. Each Stone share became one share of the new parent, Talos Energy Inc. (NYSE: TALO), with Stone holders owning 37% and Talos stakeholders 63%. Stone survived as a wholly owned subsidiary and was converted into Talos Petroleum LLC; the $102 million of Talos Production notes was contributed for stock, Talos bridge loans and Stone's senior secured notes were exchanged for new 11.0% second-priority notes, and Stone's credit agreement was terminated with nothing borrowed. Stone's directors other than Trimble and Jaubert were removed, and Trimble, Beer and Jaubert were terminated as officers when Stone was converted to an LLC. Stone's warrants were assumed by the new parent, and Stone's 2017 incentive plan was terminated. This resolves the merger, exchange offer and supplemental indenture threads.

business combination

TALOS PETROLEUM LLC's exchange filed to remove a class of its securities from listing.

listing compliance notice

On April 27, 2018 Stone agreed to buy a 100% working interest in the Ram Powell Unit (six Viosca Knoll blocks and the Ram Powell platform) from Shell, ExxonMobil and Anadarko for $34 million in cash, plus about $200 million of financial assurance instruments. The field averaged about 6,100 barrels of oil equivalent per day in 2017; closing was expected in early May 2018, and Talos gave the written consent that the pending merger agreement required. This adds a new Gulf of Mexico asset while the Talos merger is still pending.

material agreement

In the run-up to the Talos combination, enough holders of Stone's 7.5% senior secured notes due 2022 consented (by the April 2, 2018 early deadline) to strip most covenants and release the collateral securing them. Supplemental indentures were signed April 3, 2018 but take effect only just before the deal closes. The Talos issuers' exchange offer would swap these notes for new 11.0% second-priority senior secured notes and cash. Separately, the S-4 registration statement for the deal was declared effective April 9, 2018, a step toward the shareholder consent and closing. This continues the Talos merger thread.

security holder rights change

On Nov 21, 2017 Stone agreed to combine in an all-stock deal with Talos Energy LLC, which is controlled by Apollo and Riverstone funds, through a new holding company (Sailfish, to be renamed Talos Energy, Inc.). After closing, Apollo and Riverstone funds would hold 63% and Stone's former stockholders 37%. Each Stone share converts to one share of the new company, and Timothy S. Duncan becomes CEO. The deal also includes debt exchanges for Talos bridge loans and for Stone's 7.5% senior secured notes due 2022. It needs a majority of Stone shareholders' approval, antitrust and other approvals, with a May 31, 2018 end date, and termination fees of $24 million or $43 million apply in certain cases. This is a new direction after the 2017 emergence from bankruptcy.

business combination

Drilling began June 3, 2017 on the Rampart Deep prospect in Mississippi Canyon Block 116, operated by Deep Gulf Energy III. Stone holds a 40% working interest after selling down part of its position (partners: Deep Gulf 30%, Ridgewood-managed entities 30%). The company would tie it to its 100%-owned Pompano platform if successful, and expects about two months to drill. Stone also cut about 20% of its workforce (plus a smaller cut in April 2017), with a pre-tax charge of about $5-6 million in Q2 2017 and a targeted cash SG&A of about $11-12 million a quarter. James M. Trimble is now interim CEO and President, following the departure of the previous CEO.

drilling progress report

the New York Stock Exchange certified TALOS PETROLEUM LLC's securities for listing, clearing them to begin trading.

listing compliance notice

TALOS PETROLEUM LLC's exchange filed to remove a class of its securities from listing.

listing compliance notice

the New York Stock Exchange certified TALOS PETROLEUM LLC's securities for listing, clearing them to begin trading.

listing compliance notice

On Feb 27, 2017 Stone closed the sale of its roughly 86,000 net acres in Pennsylvania and West Virginia to EQT Production Company for $527 million in cash (plus an upward adjustment of up to $16 million), completing the sale that replaced the Tug Hill deal. The Tug Hill agreement ended and Stone paid Tug Hill the $10.8 million break-up fee from the proceeds. Part of the cash will fund the payments required under the confirmed bankruptcy plan, which the company expects to take effect Feb 28, 2017, though it says there is no assurance.

asset acquisition disposition

On February 15, 2017, the Bankruptcy Court confirmed Stone's prepackaged plan, with the effective date targeted for February 28, 2017. All existing common stock (about 5.7 million shares outstanding as of Feb 14, 2017) will be cancelled; holders get a pro rata share of 5% of new stock plus warrants for 15% of the reorganized company's stock, before dilution from the management incentive program and warrants. Noteholders get $100M cash, $225M of new second lien notes and 95% of the new stock; bank lenders get a new $200M revolver plus excess cash above $25M; other unsecured creditors are paid in full. A new seven-member board takes over at the effective date, including David Welch, and current directors resign. (Terms differ from the December 14 filing, which said 4% and 10% warrants and 96% for noteholders.)

bankruptcy or receivership

The Appalachia sale went to an auction on February 8, 2017, and EQT Production Company won with $527 million in cash (plus up to $16 million upward adjustment), well above Tug Hill's earlier $360 million. American Petroleum Partners was named back-up bidder at $526 million. The Bankruptcy Court approved the sale on February 10, 2017, with closing expected by February 28, 2017. Tug Hill's agreement ends at closing, with Stone paying it a $10.8 million break-up fee plus $1.85 million of expenses. This resolves the open Tug Hill sale thread, replacing that buyer with a much higher bid.

material agreement

Stone and two subsidiaries filed for chapter 11 in Houston on December 14, 2016, to carry out the prepackaged plan. Noteholders (about 79.7% of notes) and 100% of the bank lenders signed an amended support agreement, so the bank question left open earlier is now settled. Terms for existing shareholders got worse than before: 4% of the new stock (down from 5%) and warrants for up to 10% (down from 15%), both subject to dilution. Noteholders get $100M cash (down from a share of $150M of sale proceeds), 96% of new stock and $225M of new second lien notes; about $1.2 billion of debt is to be eliminated (earlier estimate ~$850M). The filing also records the debt acceleration, a stay on enforcement, an executive settlement with nine executives that cuts severance for Welch and Beer, and an expected plan completion in about 90 days.

bankruptcy or receivership

On October 20, 2016 Stone signed a restructuring support agreement with noteholders holding about 85.4% of its convertible and 2022 notes, backing a prepackaged chapter 11 filing on or before December 9, 2016. Noteholders would get 95% of the new stock, $225 million of new second lien notes and a share of Appalachia sale proceeds; existing shareholders would get 5% of the new stock plus warrants for up to 15% of post-petition equity (the stock subject to dilution from the warrants and a management incentive plan). Stone also agreed to sell about 86,000 net Appalachian acres to an affiliate of Tug Hill for $360 million cash, expected to close by February 27, 2017; no agreement has yet been reached with the bank lenders, and the plan would remove about $850 million of debt. This resolves the earlier strategic review with a heavily diluting outcome for shareholders, but it is not yet confirmed.

material agreement

On June 14, 2016 Stone and its banks amended the credit agreement, raising the borrowing base to $360 million from $300 million with no redetermination until January 15, 2017. Terms include a $125 million minimum liquidity requirement, limits on capital spending, liens on deposit accounts, and permission for second lien debt to refinance the convertible and senior notes. Stone repaid $56.8 million, leaving $360 million outstanding (including $18.3 million of letters of credit) and about $185 million cash; this replaces the installment cure from May, and restructuring alternatives including a prepackaged or prearranged bankruptcy are still under review.

material agreement

Stone chose to cure the $175.3 million borrowing base shortfall by paying it in six equal monthly installments, and paid the first, about $29.2 million, on May 13, 2016. It says it is weighing a private restructuring, asset sales, or a prepackaged or prearranged bankruptcy, is negotiating with holders of its $300 million 2017 convertible notes and $775 million 2022 notes, and chose not to pay the roughly $29 million 2022 notes interest due May 16, using the grace period to June 14, 2016 even though it says it has enough liquidity. A second NYSE notice is expected because market capitalization and stockholders' equity are each below $50 million; the reverse split proposal would not fix this one, and Stone would have 18 months to submit a plan if NYSE accepts it.

listing compliance notice

Stone reported first quarter 2016 results (reported net loss $188.8 million after $129.2 million of impairments; adjusted net loss $44.1 million; cash $367 million). The Amethyst well was shut in in late April for a suspected blockage, the remaining Pompano platform rig program was suspended due to capital constraints, and 2016 production guidance was cut to 26-28 MBoe per day. The NYSE also notified Stone on April 29, 2016 that its average share price had been under $1.00 for 30 trading days; it has six months to regain compliance, and the May 19 meeting includes a reverse stock split proposal that could address this.

listing compliance notice

On April 13, 2016 the banks cut Stone's borrowing base to $300 million from $500 million; with $457 million borrowed and $18.3 million of letters of credit, there is a $175.3 million shortfall, against about $360 million cash. Stone must elect within 30 days how to cure it (repay, add collateral, or pay in six monthly installments). Q1 2016 output was about 34 MBoe per day, with Cardona at about 17,400 Boe per day and the Amethyst well at about 24 MMcfe per day; Mary field stayed shut in. Stone is also talking with BOEM about financial assurances for abandonment obligations.

debt financing

On March 9, 2016 Stone drew $385 million on its bank credit facility, bringing borrowings to $477 million plus $19 million of letters of credit, at about 5% interest. The banks requested a borrowing base redetermination and Stone expects the base to fall below current borrowings, which would force it to repay or cure the shortfall. Stone also hired Lazard and Latham & Watkins to advise on financial, transactional and strategic alternatives, a sharp change from the 2014 position of an undrawn $500 million base.

debt financing

On Dec 8, 2014 Stone reported its Pribble 6HU Utica shale well (90% WI, West Virginia) flowed about 30 Mmcf per day over a 5-day test, which the company described as one of the highest rates per thousand feet of lateral in the area. Stone has a new rig due in late 2015 and about 30,000 Utica acres in the Mary field. This follows up the Utica development plans in the Appalachia thread.

production update

On Dec 3, 2014 Stone said Cardona (65% WI) began production in November 2014, ahead of the sanctioned schedule and under budget; wells #4 and #5 are expected to reach a combined 12,000 boe per day gross within four weeks, flowing through Pompano. This is earlier than the early-2015 first production previously expected. Madison (40%, Noble operated) spud in late October 2014, with Vernaccia (32%) and Harrier (37%) drilling planned for Q1 2015.

production update

On July 31, 2014 Stone completed the shelf properties sale to Talos Energy Offshore LLC for about $177.6 million cash after preliminary adjustments (down from $200 million), with the buyer assuming about $117 million of abandonment liabilities. The proceeds are held by a like-kind exchange intermediary: replacement property must be identified by Sept 14, 2014 and closed by Jan 27, 2015 to defer tax on the gain. This resolves the pending shelf sale; Stone keeps the four-year 50% deep-rights option.

asset acquisition disposition

On June 27, 2014 Stone agreed to sell its non-core Gulf of Mexico shelf properties to Talos Energy Offshore LLC for $200 million cash plus the buyer assuming about $117 million of future abandonment costs. The properties made about 57 MMcfe per day in Q1 2014 and were about 9% of year-end 2013 proved reserves; Stone keeps a four-year option on a 50% working interest in deep drilling rights, and closing is expected by early August 2014. This continues the shelf sale marketed since Nov 2013.

material agreement

On June 24, 2014 Stone signed a new Fourth Amended and Restated bank credit agreement led by Bank of America, maturing July 1, 2019 and replacing the one due Sept 15, 2014. The borrowing base rose to $500 million from $400 million; Stone had no borrowings and $21.0 million of letters of credit, leaving $479.0 million available. It resolves the open question about the facility's 2014 maturity.

debt financing

On May 8, 2014 Stone agreed to sell 5,000,000 new common shares at $41.00 each (underwriters get $1.64 per share), with a 30-day option for 750,000 more. Net proceeds are about $196.5M (about $226.0M if the option is fully used), for general corporate purposes that may include developing Amethyst, a second Cardona South well, Utica Shale development or more Appalachian acreage. This is the first new share issue in the record since June 2009 and dilutes existing holders; closing is scheduled for May 14, 2014.

material agreement

On Feb 24, 2014 Stone reported that the Cardona well (65% WI, operator) found 84 feet of net oil pay in its development section, and plans to flow it to the Pompano platform with first production in early 2015, a bit later than the 'late 2014' earlier projected. The CEO also referred to a 'recent Amethyst discovery' (the filing gives no details). Drilling on this well should finish in March 2014, then the rig moves to Cardona South, expected to reach total depth in the second quarter.

drilling progress report

About $236.4M (about 63%) of the $375M 8.625% 2017 notes were tendered by Nov 26, 2013 and paid for about $256.5M on Nov 27; a supplemental indenture removes substantially all covenants and some default provisions on the remaining 2017 notes. Stone also closed the $475M add-on of 7.500% notes due 2022 (total now $775M of that series) with net proceeds of about $480.1M. Stone says it intends to redeem any 2017 notes not tendered, with the timing at its discretion, and use the rest for general purposes. This completes the refinancing started on Nov 13, with the first tranche done and the rest still open.

security holder rights change

Stone priced an upsized $475M add-on to its 7.500% Senior Notes due 2022 (up $75M from the $400M first announced) at 103.00% of face, a 6.949% yield to worst, adding to the $300M issued in Nov 2012. Substantially all net proceeds are to fund the tender for the 8.625% 2017 notes, with the rest for general corporate purposes; closing is scheduled for Nov 27, 2013. The filing also records a 60-day lock on selling other debt.

material agreement

On Nov 8, 2013 Stone's bank lenders consented that the $400M borrowing base won't be cut by the sale of its remaining shelf properties, and raised the allowed amount of notes from $1.1B to $1.5B until March 31, 2014 (back to $1.1B after). On Nov 13 Stone announced a planned $400M offering of additional 7.500% Senior Notes due 2022 and a cash tender offer for all $375M of its 8.625% Senior Notes due 2017, with the offering proceeds to fund the tender. Three lawsuits by Jefferson Parish and one by Plaquemines Parish (the filing spells it 'Paquemines') allege coastal-zone law violations from oil and gas operations and seek unspecified damages; the filing says Stone has not yet begun to evaluate them. At Nov 12 there were no bank borrowings and $21M of letters of credit, leaving $379M available.

debt financing

On April 8, 2013 Stone said it had contracted an ENSCO 8500 series deep water rig for the Cardona oil program at Mississippi Canyon 29 (65% working interest, Stone operator), with the first well starting in the second half of 2013 and production projected for late 2014 via tie-back to the Pompano platform. It also reported that the Malachite deep water well (40% non-operated interest, net cost about $22 million) found only marginal hydrocarbons and is being plugged and abandoned. In Appalachia, third-party pipeline failures and a plant outage cut first-quarter net volumes by about 20 MMcfe/d, and about 20 MMcfe/d remains curtailed in the Mary field until a Williams 24-inch line is repaired. First-quarter production guidance of 38-40 MBoe/d is said to remain within range, and the La Cantera third well is expected on production in June 2013.

production update

Stone closed the $300 million 7.500% Senior Notes due 2022 on November 8, 2012 (maturing November 15, 2022, net proceeds about $288 million), and bought about $136.1 million (68%) of the $200 million 2014 notes in its tender offer, paying about $140.5 million. Holders consented to remove substantially all restrictive covenants and some default provisions from the 2014 notes indenture, and Stone intends to redeem on or about December 17, 2012 any 2014 notes not tendered. This largely resolves the 2014 note refinancing thread, though the tender offer was still open until November 20, 2012 and the redemption of the rest was only intended.

security holder rights change

On October 23, 2012 Stone priced a $300 million offering of 7.500% Senior Notes due 2022 at 98.277% of face (yield 7.750%), guaranteed by Stone Offshore, with closing scheduled for November 8, 2012. Net proceeds of about $288.0 million are to fund the pending tender offer for the 6 3/4% 2014 notes, redeem any 2014 notes not tendered, and cover general corporate purposes. This is the offering announced the day before, and it sets up the replacement of the 2014 subordinated notes with longer-dated debt carrying a higher stated coupon.

material agreement

Stone amended its bank credit agreement on October 22, 2012 so that a planned $300 million Senior Notes due 2022 offering will not cut its $400 million borrowing base, and raised its notes basket from $900 million to $1.25 billion through December 31, 2012 (then $1.1 billion). If the $200 million of 6 3/4% 2014 notes are not retired by December 31, 2012, the borrowing base falls by 30% of the unretired amount. Stone also launched a cash tender offer and consent solicitation for any and all of the $200 million 2014 notes and gave preliminary Q3 2012 figures: oil, gas and NGL revenue of about $224-227 million, production of 40,000-42,000 boe/d (above the 38,000-40,000 guidance given after Hurricane Isaac), debt of $811 million and cash of $176 million at September 30. The new notes are meant to fund general purposes, which may include repaying the 2014 notes. This continues the refinancing of the 2014 notes, and it follows the 2012 convertible notes and the cut to a $317.5 million borrowing base, which is now reaffirmed at $400 million with no borrowings and $21 million of letters of credit.

debt financing

Stone issued $300 million of 1.75% Senior Convertible Notes on March 6, 2012 (net proceeds about $291.1 million), sold to initial purchasers led by Barclays and Merrill Lynch. The notes are senior unsecured, guaranteed by Stone Offshore, and convert at an initial price of about $42.65 per share (23.4449 shares per $1,000), payable in cash, shares or a mix at Stone's election. Stone paid about $70.83 million for call options and received about $40.17 million for warrants, each covering about 7,033,470 shares (warrant strike $55.91); the call options are meant to reduce dilution on conversion, while the warrants could add dilution if the share price goes above $55.91. The filing text also gives the maturity as March 1, 2012 in one place, which looks like a typo for 2017 (inference; elsewhere it says 2017).

capital raising announcement

Stone amended its bank credit agreement on February 28, 2012 so it can issue 1.75% Senior Convertible Notes due 2017 and enter related hedge and warrant deals, and raised its allowed notes basket from $800 million to $900 million. The priced offering was $275 million, with the $25 million over-allotment option exercised in full; once the notes close, the borrowing base automatically falls from $400 million to $317.5 million. At February 27, 2012 Stone had $70 million borrowed and $27.1 million of letters of credit, leaving $302.9 million available. The press release says the roughly $239 million of remaining net proceeds is for general corporate purposes, which may include longer-term financing for the recent Pompano, Wideberth and Appalachian acquisitions and repaying bank borrowings.

debt financing

Stone closed its purchase of BP's Pompano deepwater interests on December 28, 2011, completing the deal announced in November. The $204 million stated price was adjusted to $167.6 million for a July 1, 2011 effective date, with $137.0 million paid at closing after the $30.6 million deposit, and further adjustments still to come. Funding came from cash and $45.0 million drawn on the bank facility, leaving $293.9 million available; Stone's preliminary estimates are about 17 million barrels of oil equivalent of proved reserves (about 83% oil), current net production of about 3,300 Boe per day and an asset retirement obligation of about $60 million.

asset acquisition disposition

Stone agreed to buy BP's 75% operated interest in the Pompano field in Mississippi Canyon, a 51% operated interest in Mississippi Canyon block 29, a 50% non-operated interest in the Mica field and some nearby deepwater exploration leases, for $204 million cash. It paid a $30.6 million deposit, to be applied to the price, and expects to fund the rest from cash and its bank facility. Closing is expected by early 2012, subject to preferential rights, due diligence and other conditions. This is a new Gulf of Mexico deepwater asset acquisition.

material agreement

Stone replaced its bank credit facility with a new $700 million amended and restated revolver led by Bank of America, maturing September 15, 2014 (or April 26, 2015 if the 2004-indenture notes are retired by April 15, 2014). The initial borrowing base is $400 million, with no borrowings and $61.1 million of letters of credit as of April 26, 2011, and the base is redetermined each May 1 and November 1. This replaces the facility that was due to mature July 1, 2011, and is secured by substantially all assets of Stone and Stone Offshore.

debt financing

Stone priced the $100 million add-on of its 8.625% Senior Notes due 2017 at 100.50% (yield 8.515%), on top of the $275 million issued in January 2010. Net proceeds of about $97.85 million are for general purposes including repaying bank debt and paying for additional Appalachia lease acreage. On completion the borrowing base falls from $395 million to $365 million, as the November amendment required.

material agreement

Stone amended its bank credit agreement (Amendment No. 3), confirming the borrowing base at $395 million as of October 29, 2010, and permitting up to $150 million more unsecured 2017 notes, each issuance cutting the base by 30% of the amount. As of November 3, 2010 it had $50 million borrowed and $63.1 million of letters of credit, leaving $281.9 million available. It also announced a planned $100 million add-on offering of the 2017 notes, with proceeds for general purposes including repaying bank debt and amounts due for additional Appalachia lease acreage.

debt financing

Stone closed the $275 million 8.625% Senior Notes due 2017 on January 26, 2010 (net proceeds about $265 million) and paid for about $193.2 million of the $200 million 8-1/4% 2011 notes tendered by January 25. A supplemental indenture lets Stone redeem the remaining 2011 notes on as little as three days' notice. The tender offer stays open until February 9, 2010. This completes the refinancing started earlier in January; about $6.8 million of the 2011 notes was not yet tendered (the filing does not say what happens to it).

security holder rights change

Stone priced the refinancing: $275 million of 8.625% Senior Notes due 2017 at 98.713% (yield 8.875%), larger than the $250 million first proposed, with net proceeds of about $265 million. Proceeds are meant to fund the tender offer for the 8-1/4% 2011 notes, general purposes and possibly bank debt repayment. The bank borrowing base will drop automatically from $425 million to $395 million when the notes are issued, and the 2011 notes must be repaid or redeemed within 45 days of issuance. Closing was scheduled for January 26, 2010.

material agreement

Stone amended its credit agreement to allow up to $300 million of unsecured notes, and launched a plan to refinance: a public offering of $250 million of Senior Notes due 2017 plus a cash tender offer for all $200 million of its 8-1/4% Senior Subordinated Notes due 2011, expiring February 9, 2010. The new notes' proceeds are meant to fund the tender and general corporate purposes. The amendment requires the 2011 notes to be repaid or redeemed within 45 days of issuing the new notes. At December 31, 2009, Stone had $175 million borrowed on the facility, with the borrowing base at $425 million. A 2010 capital budget was also announced, but no figures appear in the 8-K text.

material agreement

Stone sold 7,000,000 new shares at $8.00 each through underwriters led by Barclays Capital and Merrill Lynch, and the underwriters took up the full extra 1,050,000-share option. Expected net proceeds are about $60.5 million, for general corporate purposes that may include repaying bank borrowings. This adds shares, diluting existing holders, and follows the earlier plan to cut bank debt.

material agreement

Stone's bank group cut the borrowing base on its credit facility, set in August 2008 at $700 million, to $425 million as of April 29, 2009, and raised the interest and fee margins. With $356 million borrowed and $69 million of letters of credit, nothing more can be drawn; Stone has $90 million cash and says it is in compliance with its financial covenants. The next redetermination is expected by November 1, 2009.

debt financing

Stone cashed in (unwound) hedges on its 2009 oil and gas sales: all oil hedges for April-December 2009 brought in about $59 million and two natural gas hedges brought in about $54 million. It plans to use a substantial portion to build cash and reduce bank borrowings, and may also use some to cut public debt or buy back shares. It also put new hedges in place for part of 2009 volumes and later years.

production update

Stone completed its acquisition of Bois d'Arc Energy on August 28, 2008, after both companies' shareholders approved it on August 27. It paid about $935 million in cash and issued about 11.3 million new shares (each Bois d'Arc share got 0.165 Stone shares plus $13.65 cash). The cash came from about $510 million of cash on hand and $425 million drawn on a new $700 million credit facility maturing July 1, 2011. Comstock now owns about 13% of Stone and is locked up for one year with further restrictions for up to three years. Stone's two subordinated note issues (2011 and 2014) are now also guaranteed by the Stone subsidiary that took over Bois d'Arc. This completes the merger challenged in the July lawsuit; the filing does not say how that lawsuit ended.

asset acquisition disposition

A Bois d'Arc Energy shareholder filed a class action in Clark County, Nevada, against Bois d'Arc, its directors, Comstock, Stone Energy and a Stone subsidiary, seeking to block the planned Bois d'Arc merger, rescind the April 30, 2008 merger agreement and win damages. Stone says it will defend vigorously and cannot predict the outcome; its shareholder vote on issuing shares for the merger is set for August 27, 2008.

business combination