Seitel (NASDAQ:SEIEQ)
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Seitel Announces Effectiveness of Plan of Reorganization, Closing
of Institutional Private Placement of $193 Million Aggregate Principal Amount
at Maturity of 11 3/4% Senior Notes Due 2011, Commencement of 30-day Warrant
Offering and Appointment of New Board Members
HOUSTON, July 2 /PRNewswire-FirstCall/ -- Seitel, Inc. (OTC:SEIEQ) (BULLETIN
BOARD: SEIEQ) , a leading provider of seismic data and related geophysical
services to the oil and gas industry in North America, today announced that its
Plan of Reorganization (the "Plan") has become effective today.
In accordance with the Plan, which was confirmed by the bankruptcy court on
March 18, 2004, Seitel consummated a private placement of $193 million
aggregate principal amount due at maturity of its 11 3/4% Senior Notes due 2011
(the "Notes"). The Notes were offered to investors at a price of 97.675% of
the face amount of the Notes, resulting in gross proceeds to Seitel of
approximately $188.5 million. The notes will pay stated interest of 11 3/4%
per annum, semi-annually in arrears, commencing January 15, 2005. Net proceeds
of approximately $180.7 million from the Notes offering, together with an
additional cash amount, have been placed in escrow pending the completion of
equity financing transactions contemplated by the Plan (including the warrant
offering described below), and will be used, together with the net proceeds
from the warrant offering and certain cash on hand, to pay 100% of allowed
creditors' claims, together with post-petition interest, as required under the
Plan. If certain conditions to the release from escrow of such funds do not
occur on or prior to September 15, 2004, the escrowed funds will be used to
fund a special mandatory redemption of all outstanding notes at a cash
redemption price equal to 101% of the accreted value thereof, plus accrued and
unpaid interest.
Commencing today, each holder of record of Seitel's common stock as of June 25,
2004 will receive for each share owned by them on such date, one warrant to
purchase 4.926 newly issued shares of Seitel's common stock, at an exercise
price of 60 cents per share. The warrants will be exercisable and transferable
until 5:00 p.m., New York City time, on August 2, 2004. Stockholders who do not
exercise their warrants will have their percentage equity ownership in Seitel
diluted by up to approximately 83%. American Stock Transfer & Trust Company
("AST&T") is Seitel's transfer and warrant agent. Upon surrender of and in
exchange for certificates representing Seitel's "old" common stock, together
with a properly completed letter of transmittal being distributed by AST&T,
certificates representing shares of Seitel's reorganized common stock will be
issued.
Also in accordance with the Plan, effective today, Messrs. Walter M. Craig,
Jr., Robert L. Knauss, William Lerner and John E. Stieglitz resigned as
directors of Seitel. Seitel now has a classified board of directors consisting
of three classes. Class I consists of three directors who will serve for an
initial term of three years expiring in 2007, Class II consists of three
directors who will serve for an initial term of two years expiring in 2006, and
Class III consists of one director who will serve for an initial term of one
year expiring in 2005. Effective today, each of Messrs. Randall D. Stilley,
Seitel's President and Chief Executive Officer, Robert Kelley, J.D. Williams,
Charles H. Mouquin, C. Robert Black and Ned S. Holmes commenced serving as
directors of Seitel. Messrs. Fred S. Zeidman, Seitel's Chairman of the Board,
J.D. Williams and C. Robert Black will serve as the three Class I directors,
Messrs. Robert Kelley, Charles H. Mouquin and Ned S. Holmes will serve as the
three Class II directors, and Mr. Stilley will serve as the sole Class III
director. Each class of directors standing for election upon the expiration of
his initial term will be elected for successive terms of three years.
Accordingly, Seitel will not hold an annual meeting of stockholders to elect a
Class III director until 2005.
ABOUT SEITEL
Seitel is a leading provider of seismic data and related geophysical services
to the oil and gas industry in North America. Seitel's products and services
are used by oil and gas companies to assist in the exploration for and
development and management of oil and gas reserves. Seitel has ownership in an
extensive library of proprietary onshore and offshore seismic data that it has
accumulated since 1982 and that it offers for license to a wide range of oil
and gas companies. Seitel believes that our library of onshore seismic data is
one of the largest available for licensing in the United States and Canada
Seitel's seismic data library includes both onshore and offshore three-
dimensional (3D) and two-dimensional (2D) data and offshore multi-component
data. Seitel has ownership in approximately 32,000 square miles of 3D and
approximately 1.1 million linear miles of 2D seismic data concentrated
primarily in the major North American oil and gas producing regions. Seitel
markets its seismic data to over 1,300 customers in the oil and gas industry,
and it has license arrangements with in excess of 1,000 customers.
Statements in this release about the future outlook related to Seitel involve
known and unknown risks and uncertainties, which may cause Seitel's actual
results to differ materially from expected results. While Seitel believes its
forecasting assumptions are reasonable, there are factors that are hard to
predict and influenced by economic and other conditions that are beyond
Seitel's control. Among the other important factors which could cause actual
results to differ materially from those in the forward-looking statements are
the failure of the Plan to otherwise become effective, as well as other factors
detailed in the Disclosure Statement related to the Plan or in Seitel's filings
with the Securities and Exchange Commission, including its most recent Annual
Report on Form 10-K, a copy of which may be obtained from Seitel without
charge.
A registration statement on Form S-1 (No. 333-113446) relating to Seitel's
common stock purchase warrants has been filed with the Securities and Exchange
Commission and has been declared effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state. A copy of the final prospectus
covering the offer and sale of the warrants and underlying common stock is
being delivered to stockholders of Seitel as of June 25, 2004 and may be
obtained from Seitel without charge.
Contact Information:
Leonard M. Goldstein, General Counsel
Robert D. Monson, Chief Financial Officer
Telephone: 713-881-8900
DATASOURCE: Seitel, Inc.
CONTACT: Leonard M. Goldstein, General Counsel, or Robert D. Monson,
Chief Financial Officer, both of Seitel, Inc., +1-713-881-8900
Web site: http://www.seitel-inc.com/