Stone Energy Receives Notice From Bondholders
Stone Energy Corporation (NYSE: SGY) reports that as of February 15, 2006, Stone has received notice of non-compliance from holders of over 25 percent of the outstanding principal amount of its 6.75% Senior Subordinated Notes Due 2014. The notice is for failure to file its SEC reports and financial statements; however, under the indenture, the delay in filing the reports does not automatically result in an event of default. Stone previously informed the trustee of the delay in filing its 2005 third quarter 10-Q and was not given notice by the trustee. Stone believes that it will be in a position to file its financials in mid-March 2006, which would resolve this issue, although no assurance can be given as to the actual filing date. Stone has 60 days from the receipt of this notice to cure a default, if a default has occurred.
There is an aggregate principal amount of $200 million of 6.75% Senior Subordinated Notes Due 2014 outstanding. As previously stated, if there has been a default under these Notes, Stone has 60 days from the receipt of notice of such default to cure the default. If there is a default and the default is not cured during the 60 day cure period, the trustee, or the holders of at least 25 percent in aggregate principal amount of these Notes by notice to the trustee and the Company, may declare the principal amount of these Notes to be due and payable, and such principal would be due and payable immediately. If an acceleration of these Notes were to occur, Stone may be unable to meet its payment obligations with respect to these Notes. In addition, the acceleration of these Notes would result in a cross-default under Stone's indenture for its 8.25% Senior Subordinated Notes Due 2011 and its bank credit agreement. As of February 17, 2006, Stone had an aggregate principal amount of $200 million of 8.25% Senior Subordinated Notes Due 2011 outstanding, and borrowings and letters of credit of $186 million outstanding under its bank credit agreement.
Stone Energy is an independent oil and gas company headquartered in
Lafayette, Louisiana, and is engaged in the acquisition and subsequent
exploration, development, operation and production of oil and gas properties
located in the conventional shelf of the Gulf of Mexico (GOM), deep shelf of
the GOM, deep water of the GOM, Rocky Mountain Basins and the Wiliston Basin.