EPL Oil & Gas selling upsized $300 million tap of 8¼% senior notes due 2018 on Thursday

By Paul A. Harris and Aleesia Forni

Columbus, Ohio, Oct. 18 - EPL Oil & Gas Inc. is set to sell an upsized $300 million add-on to its existing 8¼% senior notes due 2018 (current ratings Caa1/B-), a market source said.

The issue was upsized from $250 million, and price talk is set at 99, implying an 8.483% yield to worst.

Books close at 10 a.m. ET on Thursday, with pricing expected thereafter.

Credit Suisse Securities (USA) LLC, BMO Securities and Jefferies & Co. are the joint bookrunners on the deal.

The Rule 144A and Regulation S with registration rights notes will be callable on Feb. 15, 2015 at 104.125.

The notes carry a 35% equity clawback at 108.25 until Feb. 15, 2014.

Upon release from escrow, proceeds will be used to finance the acquisition of 100% of the issued and outstanding member interests of Hilcorp Energy GOM, LLC, which owns certain shallow-water Gulf of Mexico shelf oil and natural gas interests.

Additional proceeds will be used to reduce the company's draw on its revolver.

EPL Oil & Gas is a Houston-based exploration and production company.

The original $210 million issue, via Energy Partners Ltd., priced at par in February 2011.

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