Calgary, Alberta – Jupiter Resources Inc. (“Jupiter” or the “Company”) announced today that it has elected to utilize the 30 day grace period (the “Grace Period”) under the indenture governing its 8.5% senior unsecured notes due October 1, 2022 (the “Senior Notes”) and has not made the US$46.75 million interest payment due on October 1st, 2018 in connection with the Senior Notes (the “October Interest Payment”).
The Company has been engaged in active dialogue with a group of Senior Noteholders representing approximately US$499 million of the Senior Notes (the “Noteholder Group”) and their financial and legal advisors, together with Apollo Global Management, as the Company’s principal shareholder and holder of approximately US$432 million of the Senior Notes, regarding a transaction that will improve Jupiter’s long-term capital structure. Although the Company has sufficient liquidity to make the October Interest Payment, it has elected to use the Grace Period to continue discussions regarding a recapitalization plan with these holders of approximately 85% of the Senior Notes, with the objective of reaching an agreement prior to the end of the Grace Period. No agreement regarding a recapitalization plan has been entered into at this time, and no assurances can be given that the Company’s efforts will result in any such agreement.
The Company remains current with all its suppliers, industry partners and contractors and intends to remain so. None of the recapitalization plans contemplated would affect any of the Company’s operations, financial or commercial obligations, aside from those that pertain to the Senior Notes.
“We intend to reposition Jupiter with sufficient financial strength and flexibility to execute our business plan and take advantage of opportunities that may arise over the coming months and years,” said Simon Bregazzi, Jupiter’s CEO. “We appreciate the support and patience of our lenders and long-term noteholders and remain committed to the relationships we have forged with our business partners.”
The election to not make the October Interest Payment on the scheduled date does not constitute an Event of Default under the indenture that governs the Senior Notes until the expiry of the Grace Period. The Company has received a waiver from its syndicate of lending banks in connection with this action until the end of the Grace Period and reserves the right to make the October Interest Payment prior to the expiry of the Grace Period.
Jupiter is an independent Calgary-based energy company with an operations office in Grande Cache, Alberta. The Company is focused on the acquisition, development and production of unconventional liquids-rich natural gas properties in the Western Canadian Sedimentary Basin.
Forward Looking Statements
Certain information provided in this release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to our pursuit of a recapitalization plan and in relation to our liquidity and ability to meet our business plan going forward, including sufficiency of cash to fund ongoing operations.
The forward-looking statements are based on information currently available as well as certain expectations and assumptions concerning anticipated financial performance, business prospects and general market conditions. Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, some of which are out of our control. These include, but are not limited to, our inability to successfully negotiate with the holders of our Senior Notes and to implement a recapitalization plan in the near term or at all to mitigate liquidity risk and avoid default under our debt agreements, general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management and services, stock market volatility, changes in environmental regulations, tax laws and royalties and the ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Jupiter’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, or if any of them do so, what benefits that Jupiter will derive therefrom. Jupiter disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Ryder McRitchie, VP Capital Markets & Public Relations