Forbes Energy Services fails to receive needed consents for 11% notes

New York, July 23 - Forbes Energy Services Ltd. said its consent solicitation for the 11% senior secured notes due 2015 issued by Forbes Energy Services LLC and Forbes Energy Capital Inc. expired without the company receiving the necessary response to amend the notes.

Forbes said it would not amend or further extend the solicitation.

"We had a very good dialogue between the company and our bondholders regarding this transaction," said John Crisp, president and chief executive officer, in a news release.

"We appreciate the support we received. Despite numerous proposals, each of which could potentially have resulted in the receipt of consents to additional funding for the company, the parties were unable to reach mutually agreeable terms for a transaction.

"Fortunately, this transaction was for the purpose of seeking discretionary funds in order to provide the company an added degree of financial flexibility.

"With the recent required repurchase of notes behind us, our improved results of operations, and minimal required maintenance capital expenditures due to our newer equipment, we anticipate that, following the upcoming interest payments on our senior notes, the company's cash position will improve throughout the balance of the year. Accordingly, we have no plans to pursue additional financing in the near-term. We will instead continue to focus on improving our working capital in such areas as improved timing for accounts receivable collections."

The solicitation expired at 4:30 p.m. ET on July 23 after being extended from July 20.

As previously reported, Forbes Energy was looking to amend the indenture in order to allow it to issue up to $20 million of additional notes under the second-priority indenture.

The company was also seeking to remove from the definition of change of control a transaction that results in a person owning more voting stock than the company's three founders.

Forbes Energy said that following the amendment, the definition of a change of control would continue to include a transaction that results in a person owning more than 35% of the company's voting stock.

The company was offering to pay a consent fee of $7.50 per $1,000 principal amount of notes.

Consents are needed from the holders of a majority of the notes.

The consent solicitation began July 6.

In order to permit the issuance of $20 million of additional notes, the company had entered into a supplemental indenture amending its first-priority floating-rate notes due 2014.

Questions may be directed to the company at 361 664-0549. Wells Fargo Bank, NA (212 515-1589) is the tabulation agent.

Forbes Energy Services is an Alice, Texas-based independent oilfield services company that provides drilling and production-related services to oil and natural gas companies.

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