Paramount Resources again extends exchange for 7 7/8% notes

New York, Jan. 18 - Paramount Resources Ltd. said it has extended the expiration date of its exchange offer and consent solicitation for its 7 7/8% senior notes due 2010 and 8 7/8% senior notes due 2014 to 5 p.m. ET on Jan. 19 from Jan. 14. The minimum tender condition had not been met, according to a news release.

Paramount said it extended the offer because discussions are continuing with representatives of the noteholder committee that has been formed in response to the offer.

At the previous announcement on Jan. 14, Paramount said it has extended the expiration date of its exchange offer and consent solicitation for its 7 7/8% senior notes due 2010 and 8 7/8% senior notes due 2014 to 5 p.m. ET on Jan. 14 from Jan. 13. The minimum tender condition had not been met, according to a news release.

On Jan. 3 Paramount said that the consent deadline had passed without extension at 5 p.m. ET on Dec. 29 and it had not received the required tenders and consents.

The company said that it had been advised that a committee of holders of both series of notes - "allegedly holding a sufficient amount of the notes to preclude the minimum tender condition specified in the [exchange offer] from being satisfied" - has been formed to respond to the company's exchange offer, and is seeking to engage Paramount in negotiations on the terms of the offer.

As previously announced, Paramount Resources, a Calgary, Alberta-based oil and natural gas exploration, development and production company, said on Dec. 13 that it intended to restructure the company by spinning off oil and gas assets in two operating areas into an income trust and said that it would also begin an offer to exchange new notes and cash for any of the 7 7/8% notes and the 8 7/8% notes and to seek noteholder consent for the restructuring transaction, which the company said would be necessary to complete the planned trust spinout. It said it would seek to remove most of the restrictive covenants and events of default applicable to untendered notes remaining outstanding.

It said that the trust spinout would be conditional on the holders of more than 50% of the principal amount of each series of notes outstanding after completion of the redemption consenting to the transaction.

Paramount said that it would offer new 8% senior notes due 2012 in the same principal amount as the 7 7/8% and 8 7/8% notes being exchanged, together with cash consideration of $133.27 per $1,000 principal amount of the 7 7/8% notes and $215.44 per $1,000 principal amount for the 8 7/8% notes, plus applicable accrued and unpaid interest up to the date of exchange. It said that the cash consideration for each series of notes being exchanged would include $30 per $1,000 principal amount of notes, which would only be paid to holders tendering by a consent deadline, to be announced later, while holders not tendering their notes by the consent deadline would not receive the consent payment as part of their consideration.

Paramount said that it would not call the company's shareholders meeting for the trust spinout unless it received the required consents from the noteholders by the consent deadline. It said that the exchange offer would not be conditional upon completion of the trust spinout.

On Dec. 17, Paramount said it had officially begun the exchange offer for the notes and the related consent solicitation on terms as previously described. It set a consent deadline of 5 p.m. ET on Dec. 29 and said that the exchange offer would expire on Jan. 13, with both deadlines subject to possible extension.

UBS Investment Bank will be dealer manager in connection with the exchange offer (call the Liability Management Group at 203 719-4210). Global Bondholder Services Corp. is the information agent for the offer (call 212 430-3774).

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