- Oil and gas company awaits outcome of pending debt exchange
- Management invokes 30-day grace period on 2017 senior notes
PetroQuest Energy Inc. fell almost 9 percent in late trading after skipping an interest payment and saying it could face bankruptcy, joining energy companies whose flow of cash has been cut to a trickle by the industry’s prolonged slump.
The oil and gas producer may consider new financing arrangements, “joint ventures, asset sales, exchange offers and a filing under Chapter 11 of the U.S. Bankruptcy Code,” PetroQuest said in a regulatory filing. The company invoked a 30-day grace period on a payment that was due Thursday on its 10 percent senior notes maturing in 2017, according to the filing.
At least 90 North American oil and gas producers have filed for bankruptcy since the start of 2015, according to data from Haynes and Boone LLP. S&P Global Ratings counts 65 defaults by energy companies this year, according to a report last month.
PetroQuest, which operates mainly in the Texas, Gulf Coast Basin and Oklahoma regions, said it “believes that it has current liquidity sufficient to make the approximately $6.8 million semi-annual interest payment,” but declined to do so pending the outcome of debt exchange offers under way. Company officials didn’t immediately respond to requests for comment.
The exchange offers outlined on Aug. 25 would swap existing notes for $280.3 million of new debt maturing in 2021 that gives the company the option to pay the interest using a combination of cash and additional debt securities. Investors would also get 3.5 million shares of common stock.
The offer is scheduled to expire Sept. 22, with holders of 79 percent of the principal already agreeing to support the deal, the company said. S&P Global Ratings cut the Lafayette, Louisiana-based company to CC from CCC on Aug. 26 and warned it might downgrade PetroQuest again.
PetroQuest shares slipped 23 cents to $2.70 as of 5:01 p.m. in New York. They’ve lost 89 percent of their value in the past two years.