Stone Energy Corporation (NYSE: SGY) announced the close of the sale of its Appalachia properties.
On February 27, 2017, Stone completed its previously announced disposition of approximately 86,000 net acres in the Appalachian regions of Pennsylvania and West Virginia to EQT Corporation, through its wholly owned subsidiary EQT Production Company, for a purchase price of $527 million in cash, subject to customary purchase price adjustments and an upward adjustment to the purchase price of up to $16 million in an amount equal to certain downward adjustments. The sale of the Properties was consummated in accordance with the terms of a purchase and sale agreement, dated February 9, 2017, by and between the Company and EQT (the "EQT PSA"). Under the EQT PSA, the sale of the Properties has an effective date of June 1, 2016. The Company will use a portion of the cash consideration received from the sale of the Properties to fund its cash payment obligations under its Second Amended Joint Prepackaged Plan of Reorganization, dated December 28, 2016 (the "Plan"), that was confirmed on February 15, 2017 by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. The Company currently expects the Plan to become effective on February 28, 2017, at which point the Company and its debtor affiliates will emerge from bankruptcy; however, there can be no assurance that the effectiveness of the Plan will occur on such date, or at all.
Upon the close of the sale of the Properties to EQT, the purchase and sale agreement (the "Tug Hill PSA") with TH Exploration III, LLC, an affiliate of Tug Hill, Inc., terminated, and Stone used a portion of the cash consideration received to pay Tug Hill a break-up fee of $10.8 million.
Additional Information
Stone and its wholly-owned subsidiaries filed their voluntary chapter 11 petitions and the Plan in the U.S. Bankruptcy Court for the Southern District of Texas in Houston on December 14, 2016. Information about the bankruptcy cases can be found at http://dm.epiq11.com/ StoneEnergy or by calling +1-888-243-5081 (toll-free in North America) or +1 503-520-4474 (outside of North America).
