Energy XXI Ltd (NASDAQ:EXXI) announced that it has made the interest payment due on itsEPL Oil and Gas, Inc. 8.25% Senior Notes. This follows the Company’s decision to defer this interest payment originally due on February 16, 2016, commencing a 30-day grace period.
As previously announced, the Company continues to work with its financial and legal advisors to analyze a variety of solutions to reduce its overall financial leverage, while maintaining primary focus on preserving liquidity. As part of this process, Energy XXI continues to engage in discussions with its debtholders and other stakeholders to develop and implement a comprehensive plan to restructure its balance sheet. Operations are continuing as normal while these discussions are ongoing.
As Energy XXI continues these discussions, the Company has elected not to make interest payments due on Energy XXI Gulf Coast, Inc.’s (“EGC”) outstanding 11% Senior Secured 2nd Lien Notes and EGC’s outstanding 6.875% Senior Notes due on March 15, 2016, commencing a new 30-day grace period. The decision not to make these interest payments does not constitute an event of default; however, if the Company does not make the interest payments or restructure the debt before the grace period expires, the holders of the notes could accelerate amounts due under the notes and a default and acceleration under the Company’s other debt instruments could also occur.
In addition, the Company has obtained an extension on the waiver to certain requirements under its Second Amended and Restated First Lien Credit Agreement (provided pursuant to the Thirteenth Amendment and Waiver dated February 29, 2016) until April 15, 2016, unless terminated earlier pursuant to the terms of the waiver. In conjunction with the waiver, the Company has agreed to reduce its borrowing base from $500 million to $377.7 million and unwind certain hedging transactions and use the proceeds therefrom to repay amounts of outstanding loans to EPL under the Credit Agreement, with the repayments resulting in a further reduction in the borrowing base of EGC and EPL. The full details of the waiver agreement have been filed on form 8-K with the Securities and Exchange Commission.
PJT Partners LP is serving as Energy XXI’s financial advisor and Vinson & Elkins L.L.P. is serving as its legal advisor. (Original Source)
Shares of Energy XXI closed yesterday at $0.7014, up $0.07 or 11.33%. EXXI has a 1-year high of $4.74 and a 1-year low of $0.29. The stock’s 50-day moving average is $0.62 and its 200-day moving average is $1.25.
On the ratings front, KeyBanc analyst David Deckelbaum downgraded EXXI to Hold, in a report issued on December 22. According to TipRanks.com, Deckelbaum has a total average return of -39%, a 14.3% success rate, and is ranked #3694 out of 3726 analysts.
Energy XXI Ltd is an oil and gas exploration and production company. The Company’s properties are located in the United States Gulf of Mexico waters and the Gulf Coast onshore.