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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 16, 2000
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PETSEC ENERGY INC.
(Exact name of registrant as specified in its charter)
NEVADA 333-31625* 84-1157209
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
143 RIDGEWAY DRIVE, SUITE 113
LAFAYETTE, LOUISIANA 70503
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (337) 989-1942
*Petsec Energy Inc. is a wholly owned operating subsidiary of Petsec Energy
Ltd, a listed Australian public company registered with the Commission as a
result of its public offering of American Depositary Receipts ("ADRs") traded
on the OTC Bulletin Board (symbol: PSJEY). Shareholders and holders of American
Depositary Shares are advised to refer to the filings of Petsec Energy Ltd for
the consolidated results.
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Forward Looking Statements
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This Form 8-K Current Report includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements
other than statements of historical facts included in this Form 8-K Current
Report, including without limitation statements regarding the projected cash
flows, planned capital expenditures, oil and gas production and reserve
estimates and analyses, the Company's financial position, business strategy and
other plans and objectives for future operations, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. There are numerous risks and
uncertainties that can affect the outcome of certain events including many
factors beyond the control of the Company including without limitation those
described in the Company's latest Annual Report filed on Form 10-K with the
Securities and Exchange Commission for the year ended December 31, 1999. All
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by such
factors.
Item 5. Other Events.
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Agreement in Principal Reached with Official Committee of Unsecured Creditors
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Petsec Energy Inc. ("Petsec" or the "Company") has reached agreement
in principal with the Official Committee of Unsecured Creditors (the
"Committee") appointed in the bankruptcy proceeding filed by Petsec, and
certain holders (the "Subject Holders") of Petsec's 9 1/2% subordinated notes
due 2007. The bankruptcy case is entitled In re Petsec Energy Inc., docket
number 00BK-50741. The case was filed on April 13, 2000 under Chapter 11 of the
United States Bankruptcy Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Western District of Louisiana (the "Bankruptcy
Court"). The agreement that has been reached between the Company, the Committee
and the Subject Noteholders is described in greater detail in a term sheet (the
"Term Sheet"), a copy of which is attached to this Form 8-K Current Report as
Exhibit 99.5 and is incorporated herein by reference.
As set forth in the Term Sheet, Petsec will commence the orderly
sale of the Company or all of its assets. Subject to approval of the Bankruptcy
Court, the investment banking firm of Houlihan, Lokey, Howard & Zukin Capital,
L.P., ("HLHZ") will act as transaction broker for the sale. All sale
transactions will be subject to approval of the Bankruptcy Court. Petsec will
file a plan of reorganization (the "Plan") that will provide for the
distribution of the proceeds of the sale to pay creditors, with the balance of
the sale proceeds, if any, distributed to the Company's sole shareholder,
Petsec (U.S.A.) Inc., a Nevada corporation ("PUSA"). PUSA is a wholly owned
subsidiary of Petsec Energy Ltd ("PEL"), an Australian public company.
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The Term Sheet further provides for certain distributions to PUSA
and certain members of the Company's management team that otherwise would have
been distributed to the holders of the 9 1/2% subordinated notes due 2007 under
the priorities established under the Bankruptcy Code.
The Term Sheet will be filed with the Bankruptcy Court. The Company
intends to file a Plan on or before June 30, 2000 that incorporates the
provisions of the Term Sheet.
The Company will invite certain pre-selected companies to
participate in a data room process. The Company expects that this process will
ultimately conclude with the sale of the Company or all of its assets. A letter
(the "Invitation Letter") disclosing certain previously unreported information
regarding the Company will be forwarded to each such pre-selected company in
the near future, and the recipient will be invited to participate in the sale
process. Certain of this information consists of estimates of current reserves,
future commodity prices and costs, and estimated future cash flows made by
Ryder Scott Company L.P., Petroleum Consultants, and Petsec. The Invitation
Letter states that the Company makes no warranty or representation as to the
accuracy or completeness of these projections or any other information
disclosed in the Invitation Letter. There can be no assurance that the
assumptions made in these projections will prove to be correct. The Invitation
Letter cautions potential buyers to make their own independent assessment. A
copy of the Invitation Letter is attached to the Form 8-K Current Report as
Exhibit 99.6 and is incorporated herein by reference.
June 16, 2000 Press Release
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On June 16, 2000, PEL issued a press release announcing that the
Company had reached an agreement with the Committee on the terms set out in the
Term Sheet. The Term Sheet was attached as an exhibit to the press release.
The foregoing summary is subject to the full text of the press
release with respect thereto, a copy of which is attached hereto as Exhibit
99.7 and is incorporated herein by reference. The Term Sheet is not attached to
Exhibit 99.7, but rather is attached hereto as Exhibit 99.5.
Item 7. Financial Statements and Exhibits.
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(b) Exhibits.
99.5 Term Sheet dated June 16, 2000 entered into, among others, by
and among Petsec Energy Inc., the Official Committee of
Unsecured Creditors of In Re Petsec Energy Inc., and certain
holders of Petsec's 9 1/2% subordinated notes due 2007.
99.6 Form of Invitation Letter that will be received by certain
pre-selected companies invited to participate in the sale
process.
99.7 Press Release dated June 16, 2000 of Petsec Energy Ltd with
respect to the Term Sheet entered into, among others, by and
among Petsec Energy Inc., the Official Committee of Unsecured
Creditors of In Re Petsec Energy Inc., and certain holders of
Petsec's 9 1/2% subordinated notes due 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PETSEC ENERGY INC.
Date: June 16, 2000 By: /s/ ROSS A. KEOGH
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Name: Ross A. Keogh
Title: Vice-President--
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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99.5 Term Sheet dated June 16, 2000 entered into, among others, by and
among Petsec Energy Inc., the Official Committee of Unsecured
Creditors of In Re Petsec Energy Inc., and certain holders of
Petsec's 9 1/2% subordinated notes due 2007.
99.6 Form of Invitation Letter that will be received by certain
pre-selected companies invited to participate in the sale process.
99.7 Press Release dated June 16, 2000 of Petsec Energy Ltd with
respect to the Term Sheet entered into, among others, by and among
Petsec Energy Inc., the Official Committee of Unsecured Creditors
of In Re Petsec Energy Inc., and certain holders of Petsec's
9 1/2% subordinated notes due 2007.