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| Costilla Energy Files Chapter 11 Bankruptcy; Company Will Continue Operations in Ordinary Course |
MIDLAND, Texas, Sept. 3 /PRNewswire/ -- Costilla Energy, Inc.
(OTC Bulletin Board: COSE) reported today that it has filed a petition under
the provisions of Chapter 11 of the United States Bankruptcy Code with the
U.S. Bankruptcy Court in Midland.
The action was taken by the Company to implement a restructuring of its
liabilities, which include $180 million in unsecured 10 1/4 % Senior Notes,
$26.5 million in secured debt under a bank credit facility, $50 million of
convertible preferred stock, and hedging obligations. The Company was not in
default on its senior notes or bank obligations at the time of filing, and has
been in discussions with a steering committee of its senior note holders and
with its bank group for the past several weeks.
Under Chapter 11, Costilla will continue, without interruption, its oil
and gas operations in the ordinary course of business, and intends to file a
reorganization plan with the U.S. Bankruptcy Court as soon as practicable.
The Company has conducted an extensive review of potential restructuring
options in consultation with its financial advisors Petrie Parkman & Co., and
expects to conclude its evaluation of these options within the next few weeks.
Costilla also reported that its common stock is now quoted on the
OTC Bulletin Board under the symbol COSE or COSE.OB.
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, Manager, Investor Relations of
Costilla Energy, Inc., 915-683-3092
