Denbury starts change-of-control tender for all remaining Encore subordinated notes series

By Jennifer Chiou

New York, March 12 - Denbury Resources Inc. announced the launch of change-of-control offers for any and all of the remaining senior subordinated notes of Encore Acquisition Co., including the following:

• 6¼% senior subordinated notes due 2014;

• 6% senior subordinated notes due 2015;

• 9½% senior subordinated notes due 2016; and

• 7¼% senior subordinated notes due 2017.

The offers will expire at 11:59 p.m. ET on April 8.

They are being made as a result of the change of control of Encore via the merger of Encore with and into Denbury. 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. The merger closed on Wednesday.

In this tender, the company is offering 101% plus accrued interest.

Settlement is slated for April 13.

Under the company's previous tender offer that ended on March 10, holders tendered $108,216,000, or 72%, of the 6¼% notes; $268,801,000, or 90%, of the 6% notes; and $123,515,000, or 82%, of the 7¼% notes. The company accepted all of the tendered notes.

Denbury said that it expects to fund the offers using some of the proceeds from an issue of $1 billion of new 8¼% senior subordinated notes due 2020.

The company previously received the needed 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.

According to a prior news release, Denbury will assume Encore's position as obligor on the remainder of all Encore senior subordinated notes.

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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