W&T Offshore Inc. is in the process of issuing $250 million of 8.5% senior notes due 2019 via a private placement to repay debt and partially fund a recent Gulf of Mexico asset acquisition.
The notes are proposed to be offered as additional notes under an indenture pursuant to which W&T Offshore initially issued $600 million principal amount of its 8.5% senior notes due 2019 on June 10, 2011. The proposed additional Notes will be treated as a single series with, and will have the same terms as, the Existing Notes, but will not be fungible with the Existing Notes for trading purposes unless and until they are exchanged for registered notes.
W&T Offshore intends to apply the net proceeds of this private offering to repay a portion of the outstanding indebtedness recently incurred under its revolving credit facility to partially fund its recently completed acquisition of exploration and production properties in the Gulf of Mexico from Newfield Exploration Co. and its subsidiary, Newfield Exploration Gulf Coast LLC.
On October 5, W&T Offshore closed on the $208 million purchase of 7.7 MMboe of proved reserves, 8,350 boepd of production (37% crude oil), and 78 GoM lease blocks from Newfield Exploration.
According to Global Hunter Securities, as of October 4, W&T Offshore had a cash balance of $46 million with $120 million drawn down on its revolver which holds a $650 million borrowing base. On a debt maturity basis, the current revolver matures in 2015 while the outstanding $600 million of 8.5% notes mature in 2019.