Houston Exploration to buy 97% of 7% notes in tender

New York, June 5 - Houston Exploration Co. said it will buy all $169.178 million of its $175 million 7% senior subordinated notes due 2013 that were tendered. The response is 97% of the notes outstanding.

The tender offer expired at 5 p.m. ET on June 5.

The company previously announced on May 21 that it received the necessary consents to amend the notes.

By the consent deadline of 5 p.m. ET on May 21, consents had been received from holders of a majority of the notes.

Houston Exploration said it had executed a supplementary indenture that will become effective when it buys the notes.

The company announced the consent solicitation and a cash tender offer on May 2.

It was soliciting consents for proposed amendments to the note indenture that would eliminate most of the restrictive covenants and events of default.

Houston Exploration said it will pay $1,010 plus accrued interest per $1,000 principal amount of notes tendered. Noteholders who tender by the consent deadline will receive an additional $2.50 per $1,000 principal amount.

Noteholders who tender must consent to the amendments and vice versa.

The company needs consents from holders of a majority of the notes to enact the amendments, and the tender offer is conditioned on the completion of Houston Exploration's pending merger with Forest Oil Corp.

J.P. Morgan Securities Inc. (212 270-3994) is the dealer manager, and Georgeson Inc. (800 279-7074) is the information agent.

Houston Exploration is an independent natural gas and crude oil producer based in Houston.

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