Empresa Nacional del Petróleo Announces Commencement of Cash Tender Offer for its Outstanding 6.25% Notes Due 2019, 5.25% Notes Due 2020 and 4.75% Notes Due 2021.

SANTIAGO, Chile, July 19, 2016 /PRNewswire/ -- Empresa Nacional del Petróleo ("ENAP" or the "Issuer") and Citigroup Global Markets Inc. (the "Offeror" or "Dealer Manager") today announced the commencement of an offer by the Offeror on behalf of ENAP to purchase for cash (the "Tender Offer") up to a maximum amount of U.S.$600,000,000 (the "Aggregate Maximum Tender Consideration") (including the Early Tender Payment, if applicable, and accrued and unpaid interest) of the outstanding 6.25% Notes due 2019 (the "2019 Notes"), 5.25% Notes due 2020 (the "2020 Notes") and 4.75% Notes due 2021 (the "2021 Notes, and together with the 2019 Notes and the 2020 Notes, the "Notes" and each, a "series" of Notes) issued by ENAP.

The Tender Offer is being made pursuant to the offer to purchase dated July 19, 2016 (the "Offer to Purchase").  The principal purpose of the Tender Offer is for ENAP to manage its liabilities.

The table below summarizes certain payment terms for the Tender Offer:

The Tender Offer will expire at 11:59 p.m. New York City time, on August 15, 2016, unless extended or earlier terminated (such date and time, including as extended or earlier terminated, the "Expiration Date").  The early tender deadline for the Tender Offer will be 5:00 p.m., New York City time, on August 1, 2016 (such date and time, including as extended or earlier terminated, the "Early Tender Date").  Registered holders (each, a "Holder" and, collectively, the "Holders") of the Notes must validly tender their Notes at or before the Early Tender Date in order to be eligible to receive the Early Tender Payment (as defined below) in addition to the Tender Offer Consideration (as defined below).  Notes tendered may be withdrawn prior to 5:00 p.m., New York City time, on August 1, 2016 (such date and time, the "Withdrawal Deadline"), but not thereafter, except as required by applicable law.

The Notes will be purchased in accordance with the "Acceptance Priority Level" (in numerical priority order) as set forth in the table above (the "Acceptance Priority Level"), with Acceptance Priority Level 1 being the highest priority, and possible proration of the Notes on the Early Settlement Date (as defined below) or the Final Settlement Date (as defined below) will be determined in accordance with the terms of the Tender Offer.  Accordingly, 2019 Notes validly tendered will be accepted before any 2020 Notes validly tendered are accepted, and 2020 Notes validly tendered will be accepted before any 2021 Notes validly tendered are accepted.  However, Notes validly tendered on or prior to the Early Tender Date will be accepted for purchase in priority to other Notes tendered after the Early Tender Date, even if such Notes tendered after the Early Tender Date have a higher Acceptance Priority Level than Notes tendered on or prior to the Early Tender Date.  If the aggregate total consideration payable (including the Early Tender Payment, if applicable, and accrued and unpaid interest) for the Notes validly tendered exceeds the Aggregate Maximum Tender Consideration, only the Aggregate Maximum Tender Consideration of Notes validly tendered will be accepted for purchase.  Accordingly, if the aggregate total consideration payable for the Notes validly tendered and not validly withdrawn on or prior to the Early Tender Date exceeds the Aggregate Maximum Tender Consideration, the Holders who validly tender Notes after the Early Tender Date will not have any such Notes accepted for payment regardless of the Acceptance Priority Level of such Notes.

If, on the Early Settlement Date or Final Settlement Date, as applicable, only a portion of a series of Notes may be accepted for purchase, the aggregate principal amount of such series of Notes accepted for purchase will be prorated based upon the aggregate principal amount of that series of Notes that have been validly tendered and not yet accepted for purchase in the Tender Offer, such that the Aggregate Maximum Tender Consideration will not be exceeded.

The total consideration for the Notes of each series (the "Total Consideration") is: (i) U.S.$1,130.00 for each U.S.$1,000 principal amount of the 2019 Notes, (ii) U.S.$1,115.00 for each U.S.$1,000 principal amount of the 2020 Notes, and (iii) U.S.$1,087.50 for each U.S.$1,000 principal amount of the 2021 Notes, which includes, in each case, an early tender payment (the "Early Tender Payment") of U.S.$30.00 per U.S.$1,000 principal amount of the Notes, and in addition, in each case, the applicable Tender Offer Consideration (as defined below).  Subject to purchase in accordance with the Acceptance Priority Level and possible proration, Holders that validly tender and do not withdraw Notes at or before the Early Tender Date will be eligible to receive the Total Consideration (including the Early Tender Payment) on a date promptly following the Early Tender Date (the "Early Settlement Date").

Subject to purchase in accordance with the Acceptance Priority Level and possible proration, Holders that validly tender their Notes after the Early Tender Date and prior to or at the Expiration Date will be eligible to receive (the "Tender Offer Consideration"): (i) U.S.$1,100.00 per U.S.$1,000 principal amount of the 2019 Notes, (ii) U.S.$1,085.00 per U.S.$1,000 principal amount of the 2020 Notes and (iii) U.S.$1,057.50 per U.S.$1,000 principal amount of the 2021 Notes, namely an amount, in each case, equal to the applicable Total Consideration less the Early Tender Payment, on a date promptly following the Expiration Date (the "Final Settlement Date").

In addition, Holders whose Notes are purchased in the Tender Offer will receive accrued and unpaid interest in respect of their purchased Notes from the last interest payment date to, but not including, (i) in the case of any Notes tendered at or before the Early Tender Date, the Early Settlement Date and (ii) in the case of any remaining Notes tendered after the Early Tender Date, the Final Settlement Date, as the case may be.

ENAP has consented to the Offeror making the Tender Offer.  It is intended that the Notes validly tendered at or prior to the Early Tender Date and purchased by the Offeror in the Tender Offer will be exchanged by the Offeror with ENAP for a decrease in the proceeds of certain new notes to be issued in a new offering proposed to be launched by ENAP (the "New Offering").

The obligation of the Offeror to accept for purchase, and to pay for, Notes validly tendered pursuant to the Tender Offer is subject to, and conditioned upon, the satisfaction or waiver of certain conditions as set forth in the Offer to Purchase, in the sole discretion of the Offeror, including pricing of the New Offering in terms satisfactory to the Issuer and the New Offering being likely to close on the business day after the Early Settlement Date.

The Information and Tender Agent for the Tender Offer is Global Bondholder Services Corporation.  To contact the Information and Tender Agent, banks and brokers may call (212) 430-3774, and others may call U.S. toll-free: (866) 470-4200.  

The sole Dealer Manager for the Tender Offer is Citigroup Global Markets Inc.  Any questions or requests for assistance may be directed to the Dealer Manager at Collect: (212) 723-6106 or U.S. Toll-Free: (800) 558-3745.  In addition, Holders may contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Tender Offer.

This notice does not constitute or form part of any offer or invitation to purchase, or any solicitation of any offer to sell, the Notes or any other securities in the United States or any other country, nor shall it or any part of it, or the fact of its release, form the basis of, or be relied on or in connection with, any contract therefor.  The Tender Offer is made only by and pursuant to the terms of the Offer to Purchase and the information in this notice is qualified by reference to the Offer to Purchase.  None of the Offeror, ENAP or the Information and Tender Agent make any recommendations as to whether Holders should tender their Notes pursuant to the Tender Offer.

* * *

This notice to the market does not represent an offer to sell securities or a solicitation to buy securities in the United States or in any other country.  The New Offering was not and will not be registered under the U.S. Securities Act of 1933 ("Securities Act"), as amended.  Consequently, the notes issued in the New Offering are prohibited from being offered or sold in the United States or to U.S. citizens without the applicable registration or exemption from registration required under the Securities Act or applicable laws of other jurisdictions.

This notice to the market is released for disclosure purposes only, in accordance with applicable legislation. It not does not constitute marketing material, and should not be interpreted as advertising an offer to sell or soliciting any offer to buy securities issued by the Issuer.  This notice to the market is not for distribution in or into or to any person located or resident in the United States, its territories and possessions, any state of the United States or the District of Columbia or in any jurisdiction where it is unlawful to release, publish or distribute this announcement, other than any exemption thereunder.

Forward-Looking Statements

This notice includes and references "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements may relate to, among other things, the Issuer's business strategy, goals and expectations concerning its market position, future operations, margins and profitability.

Although ENAP believes the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect.

The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors.

ENAP undertakes no obligation to update any of its forward-looking statements.

About Empresa Nacional del Petróleo

Empresa Nacional del Petróleo is a Chilean state-owned enterprise of the Republic of Chile, engaged in a broad range of petroleum-related activities, including the exploration, development and production of crude oil and natural gas, the transportation and storage of crude oil, refined petroleum products, liquefied petroleum gas ("LPG") and natural gas, petroleum refining and the wholesale marketing of refined petroleum products, petroleum derivatives, LPG, crude oil and natural gas.  ENAP also participates in the energy generation sector.  ENAP's principal source of revenue is the sale of refined petroleum products in Chile.

Logo - http://photos.prnewswire.com/prnh/20160719/391229LOGO

SOURCE Empresa Nacional del Petróleo