EnQuest is proposing a financial restructuring of the group, which it has agreed with key stakeholders following an extensive period of engagement and negotiation.
"The Restructuring is comprised of a number of key elements, including the implementation of the Proposed RCF Amendments and the Proposed Note Amendments, the renewal of the Surety Bond Facilities and the Placing and Open Offer," EnQuest said in a statement.
"All of these elements are inter-conditional, meaning that none of the elements will become effective if any one of them is not delivered.
"So the Restructuring would not proceed if for example, the Scheme to effect the Proposed Note Amendments is not approved by the requisite majorities of Scheme Creditors or if the shareholder Resolutions in connection with the Placing and Open Offer are not approved by Shareholders.
"The Company believes that, if successful, the Restructuring will provide the Group with a stable and sustainable capital structure, reduced cash debt service obligations and greater liquidity. These will all contribute to the continued delivery by the Group of its strategic objectives."
Chairman Jock Lennox continued:
"We are very pleased to announce today a comprehensive package of measures to place EnQuest on a strong footing to deliver our Kraken development in H1 2017 and ensure that we are well placed to deliver value to our shareholders in the medium term.
"Over the last two years, EnQuest has taken action to implement extensive cost saving programmes to refocus the business for the low oil price environment, including reducing and re-phasing both capital and operating expenditures.
"Simultaneously, EnQuest has been working on a range of other funding and liquidity options, which culminate in the Restructuring announced today. We have agreed a range of improvements on the terms of our debt facilities and we remain grateful to our RCF lenders for their continuing support. We have also reached agreement with approximately 61 per cent of our High Yield Noteholders on the Proposed Note Amendments.
"The proposed Restructuring, which encompasses amendments to EnQuest's existing RCF facility, amendments to the High Yield Notes and the Retail Notes, the renewal of the Company's Surety Bond Facilities and the Placing and Open Offer which is expected to raise £82 million in gross proceeds, will significantly improve the liquidity position of the Company so that EnQuest can deliver first oil from the Kraken development in H1 2017 in accordance with management's projections. The Kraken development continues to be on track with the FPSO set for sail away in H2 2016.
"The Board remains confident in the long term potential of the EnQuest business plan, and is of the view that the proposed Restructuring, will enhance value for all stakeholders."
At 9:14am: (LON:ENQ) EnQuest Plc share price was -1.12p at 26.63p