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| Costilla Energy Submits Proposed Plan of Reorganization |
MIDLAND, Texas, Feb. 11 /PRNewswire/ -- Costilla Energy, Inc.
(OTC Bulletin Board: COSEQ) today reported that it has filed a proposed plan
of reorganization with the U.S. Bankruptcy Court for the Western District of
Texas, Midland Division, in accordance with Chapter 11 of the United States
Bankruptcy Code. The reorganization plan, which is subject to approval by the
Bankruptcy Court, sets forth the means for addressing claims and interests in
the Company.
Under the proposed plan, Costilla's existing common and preferred stock
will be cancelled and will receive no distributions. Holders of the Company's
$180 million of 10 1/4% Senior Notes due 2006, and other unsecured creditors
will receive New Common Stock representing 100% ownership of the reorganized
company. The Company's bank credit facility will be treated as a secured
claim which may be satisfied by either refinancing provided by other parties
or a renewal note with the existing bank group. Any allowed claim related to
the Company's commodity hedging contracts will be treated as a secured claim
that may be paid either by refinancing provided by other parties or through
the issuance of a renewal note by the claimant.
Consummation of the proposed plan of reorganization will require approval
of the U.S. Bankruptcy Court. There are no assurances that the Company's plan
of reorganization will be approved or when the effective date of a plan will
be set. The Company intends to file a disclosure statement relating to the
plan of reorganization on or before February 29, 2000.
Costilla Energy, Inc. is an independent oil and gas company with
operations primarily in the Gulf Coast region of South Texas and the Permian
Basin of West Texas and Southeastern New Mexico.
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of Costilla Energy, Inc. to be materially
different from any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such factors include, among
others, the following: the volatility of oil and gas prices; the Company's
ability to replace its oil and gas reserves; the availability of capital
resources; the reliance upon estimates of proved reserves; operating hazards
and uninsured risks; competition; government regulation; and the ability of
the Company to implement its business strategy. Additional information is
available in the Company's filings with the Securities and Exchange
Commission, which are incorporated by this reference as though fully set forth
herein.
SOURCE Costilla Energy, Inc.
back to topRelated links:
Company News On-Call:
800-758-5804, ext. 126873
CONTACT:
Guy McCrary of Costilla Energy, Inc.,
915-683-3092
