Dune Energy's Preferred Stock Holders Approve Financial Restructuring Plan

HOUSTON, Nov. 23, 2011 /PRNewswire/ -- Dune Energy, Inc. (OTCBB:DUNR) ("Dune") announced today that holders of an aggregate of approximately 74% of its issued and outstanding 10% Senior Redeemable Convertible Preferred Stock (CUSIP Nos. 265338 30 1 and 265338 40 0) (the "existing preferred stock") have approved the terms of Dune's proposed financial restructuring, as set forth in the term sheet previously agreed to by a holder of approximately 64% of the existing preferred stock and holders of an aggregate of approximately 96% of Dune's issued and outstanding 10.5% Senior Secured Notes due 2012 (CUSIP NO. 265338 AC 7) (the "existing notes").  Such approved restructuring terms include the automatic conversion of all of the outstanding existing preferred stock into $4.0 million in cash and 1.5% of Dune's common stock on a post-restructuring basis, upon consummation of the overall restructuring.  Pursuant to the certificate of designation governing the terms of the existing preferred stock, the approval by the holders of at least two-thirds of the issued and outstanding shares of existing preferred stock is required in connection with certain amendments necessary to cause such automatic conversion.

As previously announced, Dune's overall financial restructuring includes an offer by Dune to purchase $300 million in aggregate principal amount of its existing notes in exchange for (a) newly issued equity securities and (b) either $50 million in principal amount of newly issued Floating Rate Senior Secured Notes due 2016 or an aggregate cash payment of $50 million.  If fully subscribed and consummated, the exchange offer would result in the ownership of 97.25% of Dune's common stock on a post-restructuring basis by the holders of existing notes tendered and exchanged pursuant to the offer.  The exchange offer will expire immediately after 11:59 p.m., New York City time, on December 13, 2011, unless extended by Dune.  Consummation of the exchange offer is a condition to the automatic conversion of the existing preferred stock.

If completed, the contemplated restructuring transactions would result in Dune's current common stockholders holding 1.25% of Dune's common stock on a post-restructuring basis. Post-restructuring, percentage ownership of common stock by holders of existing notes, holders of existing preferred stock and Dune's current common stockholders, will be subject to dilution through issuance of equity compensation pursuant to Dune's equity compensation plan.

"The overwhelming approval by the holders of our preferred stock is an important milestone on the path to completion of our restructuring, which we intend to complete before the end of this year," said James A. Watt, Dune's President and Chief Executive Officer.  "We appreciate the support shown by our preferred stockholders, and look forward to closing our pending debt exchange offer as soon as possible, so that we can free up cash flow and be in a position to exploit our asset base on a solid financial footing."

Further information regarding Dune and its financial restructuring efforts may be found in Dune's SEC filings, which are available electronically from the SEC's Electronic Document Gathering and Retrieval System, at http://www.sec.gov, and at Dune's website, which may be accessed at:  http://www.duneenergy.com.

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, intends 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'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 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 Dune'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.

Investor Contact:
Steven J. Craig
Sr. Vice President Investor Relations and Administration
713-229-6300  

SOURCE Dune Energy, Inc.