Energy XXI: Taking A Look At The First Lien (Video)

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Dallas Salazar
5.23K Followers

Summary

  • After recently taking on the responsibility of consulting a mid-size ownership group of Energy XXI shareholders, we felt compelled to break out the Energy XXI capital structure even further.
  • The Senior Credit Facility is the most senior position in the Energy XXI capital structure and has the first level of financial covenants that must be satisfied by the E&P.
  • This is an important cap structure tranche to detail.
  • Not having an intimate familiarity with this facility is a risk-management blind spot.
  • Our analysis shows the senior credit facility to be mildly restrictive.

Energy XXIThe following is a screencast breakout of the Energy XXI (EXXI) Senior Credit Facility -- the most senior position in the capital structure. We recommend using the Senior Credit Facility deck -- which will be broken out in the screencast below -- along with the 2020 Senior Secured Second Lien Notes deck and our "Stressed Equity Risk Management" roadmap deck. All are exclusive to Seeking Alpha.

Together, we believe Energy XXI investors -- across the capital structure -- will have a very solid foundational base for risk managing a position. We recommend investors pay particular attention to the cadence of the restructuring/destressing efforts as well as to the depth of the announced efforts, which we're certain will be coming over the next few quarters.

Senior Credit Facility deck presentations can be requested here.

Good luck and enjoy.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

This article was written by

Dallas Salazar profile picture
5.23K Followers
Dallas Salazar is the CEO an Austin-based consulting firm that specializes in private company lifecycle management, up to and including taking companies public, and in helping consult publicly traded companies. Mr. Salazar is also a venture investor in a portfolio of energy and commodity startups, including startups extracting oil, natural gas, helium, and carbon dioxide, as well as engaged in the business of large scale carbon sequestration. Mr. Salazar has recently had large exits in Comstock Resources, Eclipse Resources, Torchlight Energy, as well as numerous privately held natural resource and commodity extraction ventures.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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