EXHIBIT 99.1
[LOGO] BRIGHAM EXPLORATION COMPANY NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION ANNOUNCES CLOSINGS OF SIGNIFICANT FINANCINGS TO REPURCHASE
SUBORDINATED DEBT AND FUND ONGOING DRILLING ACTIVITY
--------------------------------------------------------------------------------
Austin, TX -- (Business Wire) - November 2, 2000 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced that it has entered into a series of
financing agreements that provide funding (i) to repurchase all subordinated
debt and equity securities in Brigham held by affiliates of Enron North America
(the "Enron Affiliates") at a substantial discount, and (ii) to continue and
expand Brigham's planned drilling program into 2001. As a result of the closing
of these recapitalization transactions, Brigham has made a significant step
forward in its efforts to reduce its balance sheet leverage by lowering its
estimated ratio of net debt-to-total book capitalization from 97% to 53%. The
improved balance sheet and the additional liquidity resulting from these
transactions are expected to significantly enhance Brigham's ability to finance
its balanced portfolio of exploration and development drilling projects in its
primary focus areas in the Texas Gulf Coast, Anadarko Basin and West Texas
regions.
Brigham has raised an aggregate of $40 million through the issuance of
(i) $20 million in new subordinated notes and warrants to purchase Brigham
common stock to Shell Capital Inc. ("Shell Capital"), and (ii) $20 million in
new mandatorily redeemable preferred stock and warrants to purchase Brigham
common stock to affiliates of Donaldson, Lufkin & Jenrette (the "DLJ
Affiliates"). With a portion of the proceeds from these two financing
transactions, Brigham has purchased all of the Enron Affiliates' interests in
Brigham, which included (i) $51.2 million of outstanding senior subordinated
notes due 2003 (which bore interest at annual rates of 12% to 14%) and
associated accrued interest obligations, (ii) warrants to purchase one million
shares of common stock at $2.43 per share, and (iii) 1,052,632 shares of common
stock (collectively, the "Enron Securities"), for total cash consideration of
$20 million. The remaining approximate $17.5 million in net capital availability
raised from these financing transactions after the repurchase of the Enron
Securities and the payment of estimated fees and expenses will be used by
Brigham to fund its planned drilling program into 2001.
The $20 million of new subordinated notes issued to Shell Capital (the
"SCI Notes") will bear interest at 10.75% per annum and will have no principal
repayment obligations until maturity in 2005. At Brigham's option, up to 50% of
the interest payments on the SCI Notes during the first two years can be
satisfied by payment-in-kind ("PIK") through the issuance of additional SCI
Notes in lieu of cash. The SCI Notes will be secured obligations ranking junior
to Brigham's existing $75 million senior credit facility. The SCI Notes have a
five-year maturity, are redeemable at Brigham's option for face value at
anytime, and have certain financial and other covenants. The 1,250,000 warrants
to purchase Brigham common stock issued to Shell Capital (the "SCI Warrants")
have a term of seven years, an exercise price of $3.00 per share and a cashless
exercise feature.
The $20 million of new mandatorily redeemable preferred stock issued to
the DLJ Affiliates (the "Preferred Stock") will bear dividends at a rate of 6%
per annum if paid in cash and 8% per annum if paid-in-kind through the issuance
of additional Preferred Stock in lieu of cash. At Brigham's option, up to 100%
of the dividend payments on the Preferred Stock during the first five years can
be satisfied through the issuance of PIK dividends. The Preferred Stock has a
ten-year maturity and is redeemable at Brigham's option at 100% or 101% of par
value (depending upon certain conditions) at anytime prior to maturity. The
6,666,667 warrants to purchase Brigham common stock issued to the DLJ Affiliates
(the "DLJ Warrants") have a term of ten years, an exercise price of $3.00 per
share and must be exercised, if Brigham so requires, in the event that Brigham
common stock trades at or above $5.00 per share for 60 consecutive trading days.
If Brigham requires exercise of the DLJ Warrants, proceeds from the exercise of
the DLJ Warrants will be used to fund the redemption of a similar value of then
outstanding Preferred Stock.
Pursuant to the terms of the securities purchase agreement related to
the Preferred Stock, the holders of the Preferred Stock have the right to
designate one member to Brigham's board of directors. As a result, Steven A.
Webster has joined the board of directors of Brigham contemporaneously with the
issuance of the Preferred Stock, increasing the number of Brigham
<PAGE>
directors from six to seven members. Mr. Webster is a Managing Director of
Global Energy Partners, Ltd., a merchant banking affiliate of Donaldson, Lufkin
& Jenrette that makes investments in energy companies. In addition, Mr. Webster
also serves on the boards of directors for a number of energy companies,
including serving as Chairman of Carrizo Oil & Gas, Inc., an oil and gas
exploration and production company operating principally in the Gulf Coast
region of the United States, and as Vice Chairman of the Board of R&B Falcon
Corporation, an international oil and gas drilling company that was created by
the merger of Falcon Drilling Company and Reading & Bates. Mr. Webster is the
founder and an original shareholder of Falcon Drilling Company.
As a result of these collective financing and repurchase transactions,
the number of shares of Brigham common stock outstanding has decreased from
approximately 17.0 million shares to 16.0 million shares, while its number of
fully-diluted shares outstanding (including all stock options and warrants to
purchase common stock) has increased from approximately 26.7 million shares to
32.5 million shares. Brigham's stock price had traded at or below $3.00 per
share for over 120 consecutive trading days prior to negotiation of the
financing agreements with Shell Capital and the DLJ Affiliates.
CIBC World Markets acted as financial advisor to Brigham in the
negotiation of the repurchase of the Enron Securities and the placements of the
SCI Notes to Shell Capital and the Preferred Stock to the DLJ Affiliates.
Bud Brigham, the Company's Chairman, CEO and President, remarked, "We
are extremely pleased to announce the closing of these significant financing
transactions for our company. Reducing our outstanding debt has been an
important objective, and these transactions represent significant progress in
the achievement of our goals in this area. We believe these transactions are
very attractive for our shareholders as we have, in essence, issued
approximately 5.9 million additional diluted shares through the SCI Note and
Preferred Stock transactions (after netting out the approximate two million
shares and warrants that we have purchased from the Enron Affiliates) to redeem
approximately $51 million in debt. Therefore, we've essentially issued equity to
reduce debt at an effective price of $8.73 per share, while also increasing our
corporate liquidity by approximately $17.5 million to fund, along with cash
flow, continued value creation through our balanced drilling program. These
combined transactions reduce our outstanding debt obligations by approximately
$30 million, thus reducing net debt per share by approximately $2.60. The debt
reduction, additional capital availability and reduced debt service obligations
realized from these financing transactions position our company to further
increase value for our shareholders through continued investments in our
drilling program."
Mr. Brigham further commented, "We also view this transaction as an
endorsement of our future growth prospects by several respected energy
investors. Shell Capital made an initial investment in our company in February
2000, and we are pleased to expand this relationship through its participation
in our current financing transactions. In addition, we welcome the DLJ
Affiliates as stakeholders in our future growth and the addition of Steve
Webster to our board. Steve has a remarkable track record as an astute energy
investor, entrepreneur and manager, and I am very excited about the value he
will bring to our board of directors."
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company (www.bexp3d.com) is an independent
exploration and production company that applies 3-D seismic imaging and other
advanced technologies to systematically explore and develop onshore domestic
natural gas and oil provinces.
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that are based
upon current expectations. Important factors that could cause actual results to
differ materially from those in the forward looking statements include risks
inherent in exploratory drilling activities, the timing and extent of changes in
commodity prices, unforeseen engineering and mechanical or technological
difficulties in drilling wells, availability of drilling rigs, land issues,
federal and state regulatory developments and other risks more fully described
in the Company's filings with the Securities and Exchange Commission.
Contact: Christopher A. Phelps, Vice President - Finance & Strategic Planning
(512) 427-3300 / [email protected]
