By E. Janene Geiss
Philadelphia, Sept. 20 - PetroQuest Energy, Inc. priced an upsized offering of $65 million in series B cumulative convertible perpetual preferred stock with a 6.875% dividend and a 30% initial conversion premium.
The dividend came at the cheap end of talk, which was 6.375% to 6.875%, while the conversion premium came at the rich end of the expected 25% to 30% range.
The 1.3 million preferred shares priced Wednesday after the market close.
Talk initially set the offering at $50 million.
JPMorgan Securities is the bookrunner of the registered transaction. Howard Weil Inc., Johnson Rice & Co. LLC and Coker & Palmer, Inc. are co-managers.
There is a $7.5 million over-allotment option to purchase an additional 195,000 preferreds.
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.
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.
The company plans to use the proceeds to repay the majority of its borrowings outstanding under its bank credit facility and general corporate purposes. The company plans to continue borrowing under the credit facility to fund its 2007 capital expenditures to step up its drilling and leasing activities in its longer lived areas in Arkansas, Oklahoma and East Texas.
Issuer: PetroQuest Energy, Inc.
Issue: Series B cumulative convertible perpetual preferred stock
| Amount: | $65 million
|
| Greenshoe: | $7.5 million
|
| Maturity: | Perpetual
|
| Dividend: | 6.875%
|
| Price: | $50 per share
|
| Conversion premium: | 30%
|
| Conversion price: | $14.52
|
| Conversion ratio: | 3.4433 |
|
| Call: | Call protection for three years; forced conversion beginning Oct. 20, 2010 subject to 130% hurdle
|
| Put: | No
|
| Bookrunner: | JPMorgan Securities
|
| Pricing: | Sept. 19, after close
|
| Settlement: | Sept. 25
|
| Talk: | Dividend: 6.375% to 6.875%, conversion premium: 25% to 30%
|
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