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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 11, 2000
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Date of Report (Date of earliest event reported)
COSTILLA ENERGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-21411 75-2658940
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(State or other (Commission (IRS Employer
jurisdiction) File Number) Identification No.)
400 West Illinois, Suite 1000
Midland, Texas 79701
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(Address of principal executive offices)
(915) 683-3902
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On February 11, 2000, Costilla Energy, Inc. (the "Company") filed a
proposed Plan of Reorganization (the "Plan") in its bankruptcy proceeding styled
In re: Costilla Energy, Inc., Case No. 99-70653 in the United States Bankruptcy
Court for the Western District of Texas, Midland Division. The Plan, which is
subject to the approval of the Bankruptcy Court, sets forth the means for
addressing claims against and interest in the Company. The following is a brief
summary of the treatment of certain types of claims under the Plan.
Under the proposed Plan, the Company's existing common and preferred stock
will be canceled and the holders thereof will not receive any distributions.
Holders of the Company's 10 1/4% Senior Notes due 2006, together with the other
unsecured creditors, will receive New Common Stock representing 100% ownership
of the reorganized company. The Company's bank credit facility will be treated
as a secured claim which may be satisfied by either refinancing provided by
other parties or restructuring with the existing bank group. Any allowed claim
related to the Company's commodity hedging contracts will be treated as a
secured claim that may also be satisfied either by refinancing or a
restructuring.
Consummation of the Plan will require approval of the U.S. Bankruptcy
Court. There are no assurances that the Plan will be approved or when the
effective date of a plan will be set. The Company intends to file a disclosure
statement relating to the Plan on or before February 29, 2000.
The Company issued a press release regarding the foregoing on February 11,
2000, a copy of which is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release issued February 11, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COSTILLA ENERGY, INC.
Dated: February 14, 2000 By: /s/ Bobby W. Page
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Bobby W. Page, Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release issued February 11, 2000
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EXHIBIT 99.1
[COSTILLA LETTERHEAD]
NEWS FOR IMMEDIATE RELEASE
COSTILLA ENERGY SUBMITS PROPOSED PLAN OF REORGANIZATION
MIDLAND, Texas, February 11, 2000 - Costilla Energy, Inc. (OTC Bulletin Board:
COSEQ) today reported that it has filed a proposed plan of reorganization with
the U.S. Bankruptcy Court for the Western District of Texas, Midland Division,
in accordance with Chapter 11 of the United States Bankruptcy Code. The
reorganization plan, which is subject to approval by the Bankruptcy Court, sets
forth the means for addressing claims and interests in the Company.
Under the proposed plan, Costilla's existing common and preferred stock will be
cancelled and will receive no distributions. Holders of the Company's $180
million of 10 1/4 % Senior Notes due 2006, and other unsecured creditors will
receive New Common Stock representing 100% ownership of the reorganized company.
The Company's bank credit facility will be treated as a secured claim which may
be satisfied by either refinancing provided by other parties or a renewal note
with the existing bank group. Any allowed claim related to the Company's
commodity hedging contracts will be treated as a secured claim that may be paid
either by refinancing provided by other parties or through the issuance of a
renewal note by the claimant.
Consummation of the proposed plan of reorganization will require approval of the
U.S. Bankruptcy Court. There are no assurances that the Company's plan of
reorganization will be approved or when the effective date of a plan will be
set. The Company intends to file a disclosure statement relating to the plan of
reorganization on or before February 29, 2000.
Costilla Energy, Inc. is an independent oil and gas company with operations
primarily in the Gulf Coast region of South Texas and the Permian Basin of West
Texas and Southeastern New Mexico.
Certain statements in this news release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance, or achievements
of Costilla Energy, Inc. to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: the volatility of
oil and gas prices; the Company's ability to replace its oil and gas reserves;
the availability of capital resources; the reliance upon estimates of proved
reserves; operating hazards and uninsured risks; competition; government
regulation; and the ability of the Company to implement its business strategy.
Additional information is available in the Company's filings with the Securities
and Exchange Commission, which are incorporated by this reference as though
fully set forth herein.
