Eclipse Resources Corporation Announces Offer to Exchange Outstanding 8.875% Senior Notes due 2023 for New 9.00% Senior Second Lien Notes due 2023
Eclipse Resources Corporation (“Eclipse Resources” or the “Company”)
announced today the commencement of a private offer to exchange (the “Exchange
Offer”) any and all of the Company’s outstanding 8.875% Senior
Unsecured Notes due 2023 (the “Existing Notes”) for the
Company’s new 9.00% Senior Secured Second Lien Notes due 2023 (the “Second
Lien Notes”), upon the terms and subject to the conditions set
forth in the Company’s confidential offering memorandum and related
letter of transmittal, each dated January 21, 2016.
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Principal Amount of Second Lien
Notes(1)(2)
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Title of Existing
Notes
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CUSIP No.
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ISIN
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Aggregate
Principal
Amount
Outstanding
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Early
Exchange
Consideration
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Late Exchange
Consideration
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8.875% Senior
Notes due 2023
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144A: 27890G AA8 Reg S: U2779Q AA2
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144A: US27890GAA85 Reg S: USU2779QAA23
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$550,000,000
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$500.00
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$450.00
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(1)
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Principal amount of Second Lien Notes to be issued per $1,000 in
principal amount of the Existing Notes accepted for exchange.
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(2)
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Eligible Holders will also receive in cash accrued and unpaid
interest on the Existing Notes from the latest interest payment
date to, but excluding, the Final Settlement Date (as defined
herein) or the Early Settlement Date (as defined herein), as
applicable.
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The Exchange Offer is being made only to Eligible Holders (as defined
below). For each $1,000 principal amount of Existing Notes tendered at
or prior to 5:00 p.m., New York City time, on February 3, 2016 (the “Early
Tender Date”), accepted for exchange and not validly withdrawn,
Eligible Holders of Existing Notes will receive the early exchange
consideration, which will consist of $500.00 principal amount of Second
Lien Notes per $1,000 principal amount of such Existing Notes (the “Early
Exchange Consideration”). For each $1,000 principal amount of
Existing Notes tendered after the Early Tender Date but at or prior to
the Expiration Date (as defined below) and accepted for exchange,
Eligible Holders of Existing Notes will receive the late exchange
consideration, which will consist of $450.00 principal amount of Second
Lien Notes per $1,000 principal amount of such Existing Notes (the “Late
Exchange Consideration”). Eligible Holders of Existing Notes
accepted for exchange in the Exchange Offer will also receive a cash
payment equal to the accrued and unpaid interest on such Existing Notes
from the latest interest payment date to, but not including, the Final
Settlement Date or the Early Settlement Date, as applicable. Interest on
the Second Lien Notes will accrue from the date of first issuance of the
Second Lien Notes.
The Exchange Offer will expire at 11:59 p.m., New York City time, on
February 18, 2016, unless extended by the Company (the “Expiration
Date”). The settlement date will occur promptly after the
Expiration Date and is expected to occur on February 19, 2016 (the “Final
Settlement Date”), subject to all conditions to the Exchange
Offer having been satisfied or waived by the Company. The Company may
elect, in its sole discretion, to settle the Exchange Offer and issue
Second Lien Notes with respect to any Existing Notes validly tendered
prior to the Early Tender Date (and not validly withdrawn) at any time
after the Early Tender Date and prior to the Expiration Date (the “Early
Settlement Date”), subject to all conditions to the Exchange
Offer having been satisfied or waived by the Company.
Tenders of Existing Notes pursuant to the Exchange Offer may be validly
withdrawn at any time on or prior to 5:00 p.m., New York City time, on
February 3, 2016, but not thereafter unless extended by us or required
by law.
The Second Lien Notes will be initially secured by second-priority liens
on substantially all of the Company’s and any subsidiary guarantors’
assets. The liens securing the Second Lien Notes and the related
subsidiary guarantees will be contractually subordinated to the liens on
such assets securing the Company’s revolving credit facility (the “Revolving
Credit Facility”) and certain hedging and bank product obligations
permitted thereunder, to the extent of the value of the collateral
securing such indebtedness, pursuant to the terms of an intercreditor
agreement. Any Existing Notes that remain outstanding following the
Exchange Offer will be effectively subordinated to the Second Lien
Notes, as well as the obligations under the Revolving Credit Facility
and any other secured indebtedness, in each case to the extent of the
value of the collateral securing such obligations. The Second Lien Notes
will rank senior in right of payment to any of our future subordinated
indebtedness. The Second Lien Notes will initially be fully and
unconditionally guaranteed by all of the existing subsidiaries of the
Company. Any domestic subsidiary of the Company formed after the initial
issuance date of the Second Lien Notes that is not an immaterial
subsidiary and that guarantees any of the Company’s or another
subsidiary guarantor’s indebtedness under the Company’s or another
subsidiary guarantor’s credit or other debt facility will also guarantee
the Second Lien Notes.
The Exchange Offer is subject to the satisfaction or waiver of certain
conditions set forth in the confidential offering memorandum, including
(i) entry into a security agreement and related intercreditor agreement
whereby the Second Lien Notes and related subsidiary guarantees will be
secured by a second-priority lien on the collateral securing such
obligations, (ii) entry into an amendment to the Revolving Credit
Facility, and (iii) certain general conditions. The Company may, at its
option and in its sole discretion, waive any of the general conditions
to the Exchange Offer. The Company may also terminate, amend or extend
the Exchange Offer.
The Exchange Offer is only made, and the confidential offering
memorandum and other documents relating to the Exchange Offer will only
be distributed to, holders who complete and return an eligibility form
confirming that they are (i) “qualified institutional buyers” as defined
in Rule 144A under the Securities Act of 1933, as amended (“Securities
Act”), or (ii) outside the United States and persons other than
“U.S. persons” as defined in Rule 902 under the Securities Act (such
persons, “Eligible Holders”). Holders who desire to obtain
and complete an eligibility form should contact the information agent
for the Exchange Offer, D.F. King & Co., Inc., at (800) 511-9495
(toll-free) or (212) 269-5550 (for banks and brokers), or via the
following website: http://www.dfking.com/ecr.
The Company is making the Exchange Offer only to Eligible Holders
through, and pursuant to, the terms of the confidential offering
memorandum and related letter of transmittal. None of Company, the
dealer managers, the information agent, the exchange agent, the trustee
with respect to the Existing Notes or the trustee with respect to the
Second Lien Notes or any affiliate of them makes any recommendation as
to whether Eligible Holders should tender or refrain from tendering all
or any portion of the principal amount of such Eligible Holder’s
Existing Notes for Second Lien Notes in the Exchange Offer. Eligible
Holders must make their own decision as to whether to tender Existing
Notes in the Exchange Offer and, if so, the principal amount of Existing
Notes to tender. The Exchange Offer is not being made to holders of
Existing Notes in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction.
The Second Lien Notes to be offered have not been registered under the
Securities Act or any state securities laws, and unless so registered,
may not be offered or sold in the United States or to U.S. persons
except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act and applicable
state securities laws. This press release shall not constitute an offer
to sell or a solicitation of an offer to buy, nor shall there be any
sale of any of these securities, in any jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
About Eclipse Resources
Eclipse Resources is an independent exploration and production company
engaged in the acquisition and development of oil and natural gas
properties in the Appalachian Basin, including the Utica and Marcellus
Shales.
Forward-Looking Statements
This press release contains “forward-looking statements” within the
meaning of federal securities laws. Such forward-looking
statements are subject to a number of risks and uncertainties, many of
which are beyond the Company’s control. All statements,
other than historical fact included in this press release, are
forward-looking statements. All forward-looking statements speak
only as of the date of this press release. Although the Company
believes that the plans, intentions and expectations reflected in or
suggested by the forward-looking statements are reasonable, there is no
assurance that these plans, intentions or expectations will be achieved.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements.
The Company cautions you that these forward-looking statements are
subject to all of the risks and uncertainties, most of which are
difficult to predict and many of which are beyond the Company’s control,
incident to the exploration for and development, production, gathering
and sale of natural gas, natural gas liquids and oil. These risks
include, but are not limited to, risks relating to the satisfaction of
the conditions precedent to completing the Exchange Offer, the Company’s
ability to consummate the Exchange Offer for any or all of the Existing
Notes, legal and environmental risks, drilling and other operating
risks, regulatory changes, commodity price volatility, inflation, lack
of availability of drilling, production and processing equipment and
services, counterparty credit risk, the uncertainty inherent in
estimating natural gas, natural gas liquids and oil reserves and in
projecting future rates of production, cash flow and access to capital,
risks associated with the Company’s level of indebtedness, the timing of
development expenditures and the other risks described in the Company’s
filings with the Securities and Exchange Commission.
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