Pacific Exploration Expects to Exit Creditor Protection by October 3

Pacific Exploration & Production Corp. announced that it expects to implement its restructuring plan, allowing it to come out of creditor protection, during the week of October 3. “We continue to believe that that the plan represents the best alternative for the long-term interests of the company,” said Dennis Mills, chair of the independent committee of the board of directors, in mid-August.

The embattled Canadian energy company has been reeling since the price of oil collapsed at the same time it was forced to relinquish its share of the lucrative Rubiales oil field in Colombia, the nation’s largest.

Pacific Exploration, formerly called Pacific Rubiales given the previous significance of that field to its operations, was forced to enter creditor protection earlier this year while navigating its fiscal problems.

The firm still maintains some 40 exploration blocks in Colombia, including oil fields in the Llanos Basin at Quifa, Guatiquia, and Cubiro. Its largest gas field in Colombia is La Creciente.

It offered the following statement to fully explain the nature of its agreement with creditors:

Pursuant to the terms of the indenture (the “DIP Warrant Indenture”) governing the warrants issued as part of the debtor-in-possession financing (the “DIP Financing”) made available in connection with the Creditor/Catalyst Restructuring Transaction (the “DIP Warrants”), October 3, 2016 has been designated as the “Anticipated Exit Date” (or the expected Implementation Date). The record date for determining the holders of the DIP Warrants who will be entitled to receive common shares (the “Warrant Shares”) on exercise thereof will be Monday, September 19, 2016 (the “Warrant Record Date”). On and after the Warrant Record Date, no transfer of a DIP Warrant will be accepted by Computershare Trust Company of Canada, the warrant agent, and trading in the DIP Warrants will be blocked in the book entry registration system.

Holders of the Notes (as defined in the Plan) are advised that this announcement and the Warrant Record Date do not affect trading of the Notes which, under the terms of the Plan, will remain tradable until the close of business three business days before the Implementation Date. The Company intends to provide further updates, including with respect to the Notes, closer to the Implementation Date.

From the Warrant Record Date, beneficial holders of DIP Warrants (“Beneficial Warrant Holders”) have until no later than 5:00 p.m. (Toronto time) on Friday, September 30, 2016 to complete the certification requirement set out in the DIP Warrant Indenture in order to receive their Warrant Shares on or shortly following the Implementation Date. Beneficial Warrant Holders should contact their brokers or other intermediaries for further information on how to complete and submit the required certificate.

If a Beneficial Warrant Holder fails to deliver the required certificate by Friday, September 30, 2016, they will have a 30-day grace period following the Implementation Date to provide the required certification in which case the Warrant Shares will be delivered following the receipt of such certificate. If the certification is not provided by the end of the 30-day grace period, the holders of such DIP Warrants shall have no further rights in connection therewith or in respect of Warrant Shares issuable in exchange for such DIP Warrants and the Company may cancel or otherwise retain in treasury those Warrant Shares previously issued on the exercise of the DIP Warrants. Any restrictions on transfer of the DIP Warrants under U.S. securities laws will continue to apply to the Warrant Shares issued on the exercise of such DIP Warrants.

Notwithstanding anything contained herein, the Implementation Date and certain other dates and times set out in this news release, other than the Warrant Record Date, are subject to change, in which case the Company will provide updates as it determines are reasonable. The Warrant Record Date will not be changed even if the Implementation Date is delayed. There can be no assurance that the Implementation Date will occur during the week of October 3, 2016 or at all.

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