Houston Exploration is also soliciting consents for proposed amendments to the indenture under which the Notes were issued that would eliminate most of the restrictive covenants and events of default contained in the indenture. The proposed amendments will be set forth in a first supplemental indenture and are described in more detail in the Offer to Purchase. The first supplemental indenture will not be executed unless and until Houston Exploration has received consents from holders of a majority of the outstanding principal amount of the Notes, and the amendments will not become operative unless and until Houston Exploration has accepted the Notes for purchase pursuant to the Offer to Purchase.
Consummation of the Offer is subject to the satisfaction or waiver of a number of conditions set forth in the Offer to Purchase, including the satisfaction or waiver of all conditions to completion of Houston Exploration's pending merger with Forest Oil Corporation ("Forest") and execution of the first supplemental indenture.
The Offer will expire at 5:00 p.m. Eastern time on June 5, 2007, unless extended (such date and time, as they may be extended, the "Expiration Time") or terminated by Houston Exploration. The consent solicitation will expire at 5:00 p.m. Eastern time on May 21, 2007, unless extended (such date and time, as they may be extended, the "Consent Deadline").
The consideration to be paid by Houston Exploration for each $1,000 principal amount of Notes tendered prior to the Expiration Time and accepted for payment pursuant to the Offer is $1,010.00, plus accrued and unpaid interest up to, but not including, the date of payment for such Notes. In addition, a consent payment in the amount of $2.50 per $1,000 principal amount of Notes will be paid to those holders who consent to the proposed amendments prior to the Consent Deadline. Holders who consent to the proposed amendments will be required to tender their Notes. As a result, the total consideration to be paid by Houston Exploration to those holders who deliver valid consents will be $1,012.50 per $1,000 principal amount of Notes, plus accrued and unpaid interest. Such payment will be made promptly following both the Expiration Time and the satisfaction or waiver of the conditions to closing of the Offer.
Notes tendered and related consents may be withdrawn prior to the execution of the first supplemental indenture providing for the proposed amendments but not afterwards, except in limited circumstances where withdrawal rights are required by law.
J.P. Morgan Securities Inc. is acting as the dealer manager, and Georgeson Inc. is the information agent for the Offer. Requests for documentation should be directed to Georgeson Inc. at (800) 279-7074 (toll free). Questions regarding the tender offer and consent solicitation should be directed to J.P. Morgan at (212) 270-3994 (collect).
The Houston Exploration Company is an independent natural gas and crude oil producer engaged in the development, exploitation, exploration and acquisition of natural gas and crude oil properties. The company's operations are focused in South Texas, the Arkoma Basin, East Texas, and the Rocky Mountains.
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