Sabine Oil & Gas Corp. Gets Breathing Room From Creditors
Sabine Oil & Gas Corp (OTC: SOGC) got some breathing room Friday as it continues talks with creditors aimed at avoiding a default.
The small, Houston-based oil and gas company formerly known as Forest Oil Corp., has seen its shares sink 95 percent during the past 12 months as the bottom dropped out of its market and a recent merger hit a rough patch.
Sabine jumped more than 13 percent Friday to $0.10 a share.
Sabine last month failed to make an interest payment on its credit facility and the company said lenders, lead by bondholder trustee Wilmington Savings Fund Society, agreed to hold off on further "remedies" until June 30.
In exchange, Sabine said it will "tighten certain covenants" under the credit facility.
Creditors claimed in a February lawsuit that they were deprived of $584 million when Sabine's merger with Forest Oil Corp. was restructured prior to its closing in December.
The parties to the merger "conspired to conceal the purported work-around" to the change of control, bondholder trustee Wilmington Savings claimed in the suit, according to Bloomberg.
Sabine agreed a year ago to acquire Denver-based Forest Oil Corp. in an all stock deal that was repeatedly modified before closing in December.
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