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Benton Oil and Gas Co. Announces $20 Million in Senior Unsecured Notes

Strategic Insights

— 1 min read

Benton Oil and Gas Co., an independent oil and gas exploration and production company, has issued $20 million in 13% senior unsecured notes to John Hancock Mutual Life Insurance Co. The notes bear interest at a rate of 13% and are due on June 30, 2007. This is the second note financing completed with John Hancock, following a $15 million deal in 1994. The proceeds from the latest note offering will be used primarily for the development of the company's Venezuelan project, the South Monagas Unit, and for working capital purposes.

Key Takeaways:

  • Benton Oil and Gas Co. has issued $20 million in 13% senior unsecured notes due on June 30, 2007, to John Hancock Mutual Life Insurance Co.
  • The notes bear interest at a rate of 13% and have annual principal repayments of $4 million starting in June 2003.
  • The company issued warrants entitling John Hancock to purchase 125,000 shares of Benton Oil and Gas Co.'s common stock at $17.09 per share.
  • Benton Oil and Gas Co. anticipates using the proceeds from the latest note offering primarily for the development of its Venezuelan project and for working capital purposes.
  • The company's Venezuelan project, the South Monagas Unit, is a 158,000-acre block consisting of the Uracoa, Bombal, and Tucupita oil fields.
  • Benton Oil and Gas Co. is currently conducting a 3-D seismic survey over the Uracoa field, which is being processed and interpreted on a real-time basis.
  • The company is implementing an accelerated two-rig drilling program beginning in the second half of 1995 for the development of the Uracoa oil field.
  • Benton Oil and Gas Co. has domestic operations in Louisiana and international operations in Venezuela and Russia.

Statistics:

  • Total amount of senior unsecured notes issued: $20 million
  • Interest rate on the notes: 13%
  • Annual principal repayments starting in June 2003: $4 million
  • Number of shares John Hancock is entitled to purchase: 125,000
  • Price per share: $17.09
  • Size of the Venezuelan project: 158,000 acres
  • Number of oil fields in the South Monagas Unit: 3 (Uracoa, Bombal, and Tucupita)

Sources:

  • Benton Oil and Gas Co. press release, July 5, 1995
  • PR Newswire
  • John Hancock Mutual Life Insurance Co.

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