PetroQuest $9.75 million greenshoe lifts 6.875% perpetual convertible preferreds to $74.75 million

By Devika Patel

Knoxville, Tenn., Oct. 5 - PetroQuest Energy, Inc. said the underwriters of its previously announced $65 million issue of series B cumulative convertible perpetual preferred stock have exercised their over-allotment option and the company will sell an additional 195,000 shares at $50 apiece, or $9.75 million, for the greenshoe.

PetroQuest now has netted $70.7 million from the $74.75 million offering.

As previously reported, the notes have a 6.875% dividend and a 30% initial conversion premium.

JPMorgan Securities is the bookrunner of the registered transaction. Howard Weil Inc., Johnson Rice & Co. LLC and Coker & Palmer, Inc. are co-managers.

Each share is convertible at any time for 3.4433 shares of PetroQuest's stock, equal to a conversion price of about $14.52 per share. The stock closed Wednesday at $11.17 per share.

The preferreds have call protection for the first three years and then a forced conversion provision subject to a 130% hurdle. There are no puts.

The company plans to use the proceeds to repay the majority of its borrowings outstanding under its bank credit facility and general corporate purposes.

PetroQuest is a Lafayette, La.-based oil and natural gas company that drills primarily in the Arkoma Basin, East Texas, South Louisiana and the shallow waters of the Gulf of Mexico.

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