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Feb 16 (Reuters) - Oil and natural gas producer Energy XXI Ltd said it would not make an interest payment due on Tuesday, to continue talks with debtholders related to its capital structure improvement.
Energy XXI is one of the companies that have been battered by the 70 percent slump in crude prices since June 2014 that has forced oil and gas producers to restructure debt or seek bankruptcy protection.
The company also declared a dividend of one preferred share purchase right for each outstanding common share, as part of a tax benefit plan adopted by its board.
The rights will be exercisable if a person or group acquires 4.9 percent or more of the company’s common shares.
The company’s shares were up about 4 percent at 49 cents in mid-morning trading.
Houston-based Energy XXI, which owns assets in South Louisiana and in the Gulf of Mexico, is one of the U.S. producers with the highest levered breakeven prices, of above $60 per barrel, more than double the current U.S. crude spot prices.
The company, which has a grace period of 30 days to make the interest payment, said it had retained PJT Partners LP and Vinson & Elkins LLP to advise its board on reviewing its debt.
Energy XXI had $3.62 billion in long-term debt, excluding current maturities, as of Dec. 31. The company had $269 million in cash and short-term investments as of Jan. 31.
Net loss attributable to the company’s shareholders widened to $1.31 billion in the second quarter ended Dec. 31, from $278.8 million a year earlier, Energy XXI said on Tuesday. (Reporting by Amrutha Gayathri in Bengaluru; Editing by Maju Samuel)