Each one in plain English, with the numbers worked through for a shareholder.
30 June 2014material agreement● NeutralMajor
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.
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.
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.
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.
A Dec 30, 2013 drilling update said the San Marcos deep water well (25% non-operated) reached about 28,500 feet with no commercial hydrocarbons and will be plugged and abandoned. Amethyst (MC 26, 100% WI) and Tom Cat (West Cameron 176, 100% WI) were still drilling, both expected to reach targets in late January 2014. The Cardona rig (Ensco 8502) was due to spud in early January 2014, and Mica Deep (50% non-operated) in Q1 2014.
27 Nov 2013security holder rights change● NeutralMajor
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.
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.
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.
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.
8 Nov 2012security holder rights change▲ GoodMajor
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.
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.
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.
6 Mar 2012capital raising announcement● NeutralMajor
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).
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.
28 Dec 2011asset acquisition disposition▲ GoodMajor
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.
Stone reported that 11 wells in its Mary field (Wetzel County, West Virginia) flow-tested at 3 to 5 MMcf of gas per day each, with more condensate and natural gas liquids than expected. The pipeline needs extra equipment to take all 11 wells continuously, so production has been intermittent for several weeks; another 13 drilled wells are expected to be fractured and produced in 2012. Stone also added about 10,000 net acres in West Virginia in the second half of 2011 (total about 90,000 net Appalachian acres) and agreed a 50/50 joint operating agreement with Magnum Hunter Resources on 1,925 acres in the Heather field, with Stone as operator.
Stone said the partnership drilling the Lighthouse Bayou prospect in southwestern Louisiana is temporarily pausing the well, which reached 25,500 feet and hit the limits of the current drilling equipment. Plans are to plug the well for now, get higher-pressure-rated equipment and return in 2012 to drill deeper to the Wilcox section. Stone holds about a 25% working interest; this is its third Deep Gas exploration well there, after the LaPosada and South Erath discoveries (initial production expected in the next few months).
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.
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.
Stone furnished a press release on its 2010 reserves and an operational update; the exhibit title says reserve growth of 15% for 2010. No other figures appear in the 8-K text.
Stone furnished a press release announcing its 2011 capital budget and an operational update. The 8-K text gives no figures; they are only in the attached press release.
Stone closed the $100 million add-on of 8.625% Senior Notes due 2017 on November 17, 2010, receiving about $97.85 million net. This brings the 2017 notes to $375 million in total (sum of the $275 million and $100 million issues). Use of proceeds is as announced: repaying bank borrowings and paying for additional Appalachia lease acreage.
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.
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.
29 Jan 2010security holder rights change▲ GoodMajor
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).
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.
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.
Stone's banks left the credit facility borrowing base unchanged at $425 million, avoiding the cut seen in April. At September 30, 2009 it had $250 million borrowed and $69 million of letters of credit, leaving $106 million available. The attached press release also raised third-quarter production guidance, but the figures are not in the 8-K text.
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.
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.
