Pacific Exploration & Production Corporation’s restructuring plans remain unchanged, but it has moved back its implementation date by a little more than a week. The Canadian energy company has set October 12 as the day it will close its recapitalization deal with Toronto-based private equity fund Catalyst Capital Group Inc., an arrangement that will allow it to leave creditor protection. Earlier projections from the firm set the date for October 3.
In a statement, Pacific Exploration said its agreement with Catalyst Capital will close on October 12, “assuming satisfaction or waiver of the remaining conditions, including finalization of negotiations with respect to certain pending matters.”
Despite that caveat, the company also says it “confirms that the share or cash distributions under the plan, as set out in the company’s press release of September 26, 2016, remain unchanged.”
As first reported in April by Reuters, the arrangement is expected to clear around $5 billion USD of debt and more than $250 million USD in annual interest costs off of Pacific Exploration’s books. The company said Catalyst Capital, among other creditors, will inject some $500 million USD of debtor-in-possession financing.
The restructuring plan with Catalyst Capital was negotiated despite “strong opposition from some Pacific shareholders who argued the deal favors management over investors,” according to a Wall Street Journal report in April.
Pacific Exploration entered creditor protection the same month after filing with the Superior Court of Justice in Ontario, Canada. Prior to the filing, it had failed to make bond interest payments in both January and March.
The falling price of oil — on top of being forced to turn over control of Colombia’s lucrative Rubiales oilfield to the state-controlled Ecopetrol — has left the firm reeling in recent years with few options to meet payments on its debt. The company was known as Pacific Rubiales Energy Corp. before Ecopetrol decided not to renew a contract that would allow the Canadian firm to continue overseeing production at the nation’s largest oilfield. It rebranded soon after.