Denbury tenders for three series of Encore's subordinated notes

By Jennifer Chiou

New York, Feb. 9 - Denbury Resources Inc. announced the start of a cash tender offer for any and all of the following Encore Acquisition Co. senior subordinated notes:

• $150 million of 6¼% senior subordinated notes due 2014,

• $300 million of 6% senior subordinated notes due 2015; and

• $150 million of 7¼% senior subordinated notes due 2017.

As previously reported, Denbury agreed to acquire Encore in a cash-and-stock deal valued at $4.5 billion, including the assumption of debt and the value of the minority interest in Encore Energy Partners LP.

Denbury is also soliciting consents to amend the note indentures to, among other things, eliminate most of the restrictive covenants, eliminate or modify certain events of default, and eliminate or modify related provisions.

The offer and solicitation will end at 5 p.m. ET on March 9.

For each $1,000 principal amount, the company will pay $1,012.50 for all notes, including a consent payment of $2.50.

The company will also pay accrued interest.

Denbury is seeking consents from holders of a majority of the notes, adding that it expects to fund the offer using a portion of the proceeds from a $1 billion issue of new 8¼% senior subordinated notes due 2020.

J.P. Morgan Securities Inc. is the dealer manager and solicitation agent (800 245-8812). MacKenzie Partners, Inc. is the information agent (call collect 212 929-5500 or 800 322-2885; or tenderoffer@mackenziepartners.com).

Denbury and Encore are oil and natural gas companies based in Plano, Texas, and Fort Worth, respectively.

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