Tatham Offshore Secures Bridge Loan Commitment and Launches Equity Rights Offering

Strategic Insights -

Tatham Offshore, Inc. has accepted a bridge loan commitment from DeepFlex Production Services, Inc., a subsidiary of DeepTech International Inc., to fund operating expenses and capital expenditures. The bridge loan up to $12.5 million will bear interest at 15 percent per annum and be due on July 1, 1996. In addition, the company has approved an underwritten equity rights offering to provide a repayment mechanism for the bridge loan. The offering will distribute one Right for each share of Tatham Offshore Common Stock, entitling the holder to purchase a warrant covering one share of Preferred Stock at $1.00 per share.

Key Takeaways:

  • Tatham Offshore secured a bridge loan commitment of up to $12.5 million from DeepFlex Production Services, Inc.
  • The bridge loan will fund operating expenses and certain capital expenditures.
  • The loan will bear interest at 15 percent per annum and be due on July 1, 1996.
  • Tatham Offshore's board of directors approved an underwritten equity rights offering to provide a repayment mechanism for the bridge loan.
  • The offering will distribute one Right for each share of Tatham Offshore Common Stock, entitling the holder to purchase a warrant covering one share of Preferred Stock at $1.00 per share.
  • The exercise price for the purchase of the Preferred Stock will be $1.00 per share.
  • The Preferred Stock will carry a 15 percent cumulative dividend based on a liquidation preference value of $1.00 per share and will be convertible into common equity securities of Tatham Offshore.
  • Tatham Offshore has received a firm underwriting commitment from an investment banking firm covering any warrants that are not subscribed for by holders of the Rights.
  • The company expects to complete the loan documentation and satisfy all conditions to funding on or before October 20, 1995.
  • The CEO, Donald S. Taylor, stated that the bridge loan and rights offering will provide the company with the flexibility to implement its business strategy and enable it to realize the benefits from the development of its properties.
  • Tatham Offshore is an independent energy company engaged in the development, exploration, and production of oil and gas interests offshore in the Gulf of Mexico.

Statistics:

  • $12.5 million: the maximum amount of the bridge loan
  • 15 percent: the annual interest rate on the bridge loan
  • 1996: the due date for the bridge loan
  • $1.00: the exercise price for the purchase of Preferred Stock
  • $1.00: the liquidation preference value of Preferred Stock
  • 15 percent: the cumulative dividend on Preferred Stock
  • October 20, 1995: the expected completion date for loan documentation and satisfaction of conditions to funding

Sources:

  • PRNewswire, "Tatham Offshore, Inc. Accepts Bridge Loan Commitment from DeepFlex Production Services, Inc.", October 11, 1995.