Bill Barrett agrees to swap $84.7 million of 7 5/8% notes for stock

By Marisa Wong

Morgantown, W.Va., June 2 – Bill Barrett Corp. said it has agreed to a privately negotiated exchange with a holder of its 7 5/8% senior notes due 2019.

In the transaction, the holder will exchange about $84.7 million of the notes for 10 million newly issued shares of the company’s common stock, plus a cash payment of accrued interest, according to a press release.

As a result of this transaction, the company reduced as of March 31 the principal amount of its nearest term notes by 21% and net debt by 12%. The company will also realize annual interest savings of roughly $6.5 million.

Chief executive officer and president Scot Woodall said in the release, “We remain focused on opportunities to increase stakeholder value by improving our balance sheet, and this debt exchange represents another positive step in these ongoing efforts.

“The debt reduction at a discount to par and associated interest savings on our highest interest rate debt, combined with our previously announced strategic sale of non-core assets in the Uinta Basin for $30 million, further strengthens our balance sheet. Additionally, we have taken advantage of stronger oil prices to add hedges to protect future cash flows.”

Woodall added, “We are off to a good start to the second quarter as oil prices have moved higher, costs and differentials continue to improve, and production is trending above quarterly guidance. We remain financially well positioned with a meaningful cash position, an undrawn credit facility, and a strong hedge position that together provide ample liquidity to manage through this challenging environment.”

Denver-based Bill Barrett develops oil and natural gas.

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