Dune Energy Commences Trading Post the Previously Announced Reverse Split

Jan 03, 2012, 11:17 ET from Dune Energy, Inc.

HOUSTON, Jan. 3, 2012 /PRNewswire/ -- Dune Energy, Inc. (OTCBB:DUNR) ("Dune")  announced that effective today, January 3, 2012, Dune will commence trading that reflects the 100 for 1 reverse stock split announced and effective on December 22, 2011.  Total common shares outstanding post the split will be approximately 38.6 million.  The new CUSIP number is 265338707.  For the next 20 business days a "D" will be appended to the ticker symbol, resulting in a symbol of DUNRD.  After 20 business days the symbol will revert back to DUNR.

Summary of the Restructuring
The $300 million of 10 1/2% Senior Secured Notes with a maturity of June 2012 has been converted into approximately 97.2% of the outstanding common stock or 37.5 million shares.  Approximately $49.5 million of new Floating Rate Senior Secured notes has been issued to the old note holders with a maturity of June of 2016.  These notes are payable quarterly with an interest rate of LIBOR plus 13% with a minimum LIBOR of 1.5%.  At the company's option, the interest payment can be in cash or 3% cash and the remainder in the form of a Payment in Kind, or PIK.  Approximately $297 million of the $300 million of old notes, or 99%, was converted in this transaction.  The approximately $3 million of remaining old notes outstanding has had the majority of the covenants stripped, will receive their interest payment as scheduled, and will be retired at maturity. 

The approximately $160 million of 10% Convertible Preferred Shares has been cancelled in exchange for $4 million in cash and 584,000 common shares, or approximately 1.5% of the outstanding shares.

The approximately 48.7 million common shares prior to the restructuring have been converted into 487,000 shares, or approximately 1.3% of the outstanding shares.

The $40 million Wayzata term loan has been paid in full and replaced with a new $200 million senior secured revolving credit facility with an initial availability of $63 million.

The $8 million of restricted cash securing bonds for plugging liabilities associated with various fields has been replaced with a $2 million letter of credit under the credit facility.

Year-end Liquidity Position
The company ended the year with a cash position of $20 million.  The remaining available credit under the revolver is $22 million, thus providing Dune with approximately $42 million of liquidity going into 2012. Outstanding debt at year-end consists of approximately $49.5 million of Floating Rate Senior Secured Notes due in 2016, $3.0 million of old Senior Secured Notes due in 2012, and $39 million drawn under the revolver. In addition, letters of credit totaling $2 million have been issued primarily to secure plugging and abandonment bonds. 

James A. Watt, President and Chief Executive Officer, stated, "This total restructuring of the balance sheet will allow the company to focus on drilling and production operations to increase production and reserves and build value for our shareholders.  Our cash flow and availability under the revolver will now be dedicated to investing in operating activities." 

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FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements that are intended to be covered by "forward-looking statements" safe harbor provided by the Private Securities Litigation Reform Act of 1995.  All statements included in this press release that address activities, events or developments that Dune Energy expects, believes or anticipates will or may occur in the future are forward-looking statements.  Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.'s projects and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune's Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission.



CONTACT: Investors, Steven J. Craig, Sr. Vice President Investor Relations and Administration, Dune Energy, Inc., +1-713-229-6300




SOURCE Dune Energy, Inc.