EXHIBIT 99.1
NEWS RELEASE BENZ
ENERGY INC.
November 8, 2000
FOR IMMEDIATE RELEASE
BENZ ENERGY INC. FILES BANKRUPTCY PETITION
HOUSTON, TEXAS - BENZ ENERGY INC. (CDX: BZG.V) today announces that
Benz and its wholly owned subsidiary Texstar Petroleum, Inc. jointly filed a
petition for protection under Federal bankruptcy law in the United States
Bankruptcy Court, Eastern District of Texas. The decision to seek protection
was taken because the Company now believes that a restructuring of its
indebtedness cannot be completed without the protection and assistance of the
bankruptcy court.
Timing of the bankruptcy filing was imposed by several factors,
including (1) the acceleration of the Company's $25.7 million senior secured
credit facility, (2) the liquidation of the Company's natural gas hedge
associated with the credit facility and subsequent demand for $6.8 million of
liquidation cost, (3) the posting for foreclosure of all collateral by the
Company's senior secured creditor, (4) notice of default under the Company's
secured note with certain trade vendors, and (5) the acceleration of the
Company's $20.8 million of senior subordinate convertible debentures due to
nonpayment of interest due September 30, 2000. The event of default on the
senior secured credit facility and the associated hedge liquidation are a
result of the substantial decline in independently estimated proven reserves
that serve as collateral for the credit facility. The decline in proven
reserves and associated decline in net production combined with the
additional burden of the hedge liquidation cost made the process of working
through a restructuring problematic without the protection of a bankruptcy
filing.
Benz anticipates filing in the near term a disclosure statement and
re-organization plan that the Company believes is fair to both its creditors
and shareholders and incorporate current settlement discussions being held
with creditors.
Benz Energy Inc. is an exploitation and production oil and gas company
based in Houston, Texas, focused on natural gas in the onshore U.S. Gulf
Coast region of Mississippi and Texas. Its offices have been relocated to
110 Cypress Station Dr. #255, Houston, Texas 77090; the new telephone numbers
are 281-586-7491 and (fax) 281-583-2699.
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CAUTIONARY STATEMENT AS TO FORWARD-LOOKING INFORMATION
Investors are cautioned that the preceding statements of the Company
include certain estimates, assumptions and other forward-looking information
("forward-looking statements (information)") within the meaning of the
Securities Litigation Reform Act. The actual future performance,
developments and/or results of the Company may differ materially from any or
all of the forward-looking statements (information), which include current
expectations, estimates and projections, in all or part attributable to
general economic conditions and other risks, uncertainties and circumstances
partly or totally outside the control of the Company, including negotiations
with other parties, rates of inflation, natural gas prices, reserve
estimates, drilling risks, future production of oil and gas, changes in
future costs and expenses related to oil and gas activities and hedging,
financing availability, results of its bankruptcy filing and other risks
related to financial activities.
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For additional information:
110 Cypress Station Dr., #255, Houston, Texas 77090, 281-586-7491,
Fax: 281-583-2699