Embattled El Paso Corp. said last Tuesday it received waivers from lenders on its $3 billion revolving credit facility in order to deal with potential issues arising from the company’s major downward adjustment to its oil and natural gas reserves.
The waivers come as El Paso informed the Securities and Exchange Commission (SEC) that its annual 10-K would be filed late as it continues to assess how the downward revision in its oil and gas reserves will affect previously reported financial results.
El Paso also said it requested and expects to receive additional 30-day waivers on other financings that have a current outstanding balance of $30 million.
In February, the Houston-based energy company disclosed it had overbooked its oil and natural gas reserves by 41%, or by 1.8 Tcfe. El Paso has delayed indefinitely reporting its fourth quarter 2003 earnings pending the completion of both an internal and an independent review of the impact of the reserve revision on financial results (see NGI, March 15).
El Paso formally notified the SEC last Tuesday that its 10-K filing for 2003 would be delayed. “Because of the additional time required to determine whether a restatement is appropriate, and if so, the time and magnitude of the restatement, we could not file our Form 10-K on or before March 15…without unreasonable effort or expense,” it told the agency.
In a separate 8-K report submitted to the SEC last Monday, El Paso estimated its corporate debt stood at $20.4 billion as of Dec. 31 of last year, down by $1.5 billion from Sept. 30. The company said the reduction in the size of its debt was due to fourth-quarter asset sales.
The struggling energy firm told the federal watchdog agency that it had announced or closed a total of $2.88 billion in asset sales since Dec. 1. El Paso said its long-range plan is to sell as much as $3.85 billion in company assets to further scale back debt.
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