Preferred Stock Channel
Escalera Resources Co | 9.25% Series A Cumulative Preferred Stock (DBLEP)

Prospectus excerpt:  1,400,000 shares of 9.25% Series A Cumulative Preferred Stock, which we refer to as the Series A Preferred Stock. We may sell up to 210,000 additional shares of Series A Preferred Stock upon exercise of the underwriterÆs option.

Dividends: Holders of the Series A Preferred Stock will be entitled to receive, when and as declared by the board of directors, out of funds legally available for the payment of dividends, cumulative cash dividends on the Series A Preferred Stock at a rate of 9.25% per annum of the $25.00 liquidation preference (equivalent to $2.3125 per annum per share). However, under certain conditions of our non-payment of dividends on the Series A Preferred Stock or if the Series A Preferred Stock is no longer subject to a national market listing, the dividend rate on the Series A Preferred Stock may increase to 12.00% per annum. We will pro-rate the September 30, 2007 dividend payment based on the actual number of days the Series A Preferred Stock is outstanding for the third quarter. Commencing on September 30, 2007, dividends will be payable quarterly in arrears on or about the last calendar day of each March, June, September and December. Dividends on the Series A Preferred Stock will accrue regardless of whether: our agreements, including our credit facilities, at any time prohibit the current payment of dividends; we have earnings; there are funds legally available for the payment of such dividends; or such dividends are authorized by our board of directors. All of our dividends on the shares of Series A Preferred Stock will be credited to the previously accrued dividends on the shares of Series A Preferred Stock. We will credit any dividends made on the Series A Preferred Stock first to the earliest accrued and unpaid dividend due.

Penalties as a result of our failure to maintain a national market listing If we fail to maintain a listing or quotation of the Series A Preferred Stock on the New York Stock Exchange, American Stock Exchange LLC or The NASDAQ Global, Global Select or Capital Market, or a comparable national exchange, which we refer to collectively in this prospectus supplement as a ônational market listing,ö for 180 days or more, then (i) the annual dividend rate on the Series A Preferred Stock will be increased to 12.00% per annum commencing on the 181st day of no national market listing; and (ii) the holders of Series A Preferred Stock, voting separately as a class with holders of all other series of parity preferred shares upon which like voting rights have been conferred and are exercisable, will have the right to elect two directors to serve on our board of directors in addition to those directors then serving on the board of directors. Such increased dividend rate and director service will continue for so long as there is no national market listing of the Series A Preferred Stock.

Penalties as a result of failure to pay dividends If cash dividends on the outstanding Series A Preferred Stock are not paid in full for any six consecutive or non-consecutive quarters; then, until we have paid all accumulated and unpaid dividends on the shares of our Series A Preferred Stock in full (i) the annual dividend rate on the Series A Preferred Stock will be increased to 12.00% per annum, which we refer to as the ôPenalty Rate,ö commencing on the first day after the sixth missed quarterly payment; (ii) if we do not pay dividends in cash, dividends on the Series A Preferred Stock, including all accrued but unpaid dividends, will be paid either (a) if our common stock is then subject to a national market listing, in the form of fully-tradable registered common stock of our Company (based on the then prior 10-day weighted average daily trading price ending on the business day immediately preceding the payment) and cash in lieu of any fractional share, or (b) if our common stock is not then subject to a national market listing, in the form of additional shares of Series A Preferred Stock with a liquidation value equal to the amount of the dividend and cash in lieu of any fractional share; and (iii) the holders of Series A Preferred Stock, voting separately as a class with holders of all other series of parity preferred shares upon which like voting rights have been conferred and are exercisable, will have the right to elect two directors to serve on our board of directors, in addition to those directors then serving on our board of directors, until we have paid all dividends on the shares of our Series A Preferred Stock for all dividend periods up to and including the dividend payment date on which the accumulated and unpaid dividends are paid in full. When we have paid cash dividends at the Penalty Rate for an additional two consecutive quarters, the dividend rate will be restored to the stated rate and the foregoing provisions will not be applicable, unless we again fail to pay a dividend for any future quarter. Special redemption upon change of ownership or control Following a ôChange of Ownership or Controlö of us by a person or entity other than by a ôQualifying Public Company,ö we (or the acquiring entity) will be required to redeem the Series A Preferred Stock, in whole but not in part, within 90 days after the date on which the Change of Ownership or Control has occurred, for cash at the following price per share, plus accrued and unpaid dividends (whether or not declared), up to the redemption date:

June 30, 2008: $26.00, June 30, 2009: $25.75, June 30, 2010: $ 25.50, June 30, 2011: $25.25, June 30, 2012 or thereafter $25.00

A Change of Ownership or Control of us by a Qualifying Public Company will not require a mandatory redemption of the Series A Preferred Stock, but such Qualifying Public Company will have the right for a period of 90 days after a Change of Ownership or Control to redeem the Series A Preferred Stock pursuant to the special redemption provisions listed above.

Ranking: The Series A Preferred Stock will rank (i) senior to our common stock and any other equity securities that we may issue in the future, the terms of which specifically provide that such equity securities rank junior to such Series A Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up, referred to as ôjunior sharesö; (ii) equal to any shares of equity securities that we may issue in the future, the terms of which specifically provide that such equity securities rank on par with such Series A Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up, referred to as ôparity sharesö; (iii) junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank senior to such Series A Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up (any such issuance would require the affirmative vote of the holders of at least a majority of the outstanding shares of Series A Preferred Stock), referred to as ôsenior sharesö; and (iv) junior to all our existing and future indebtedness.

Liquidation preference: If we liquidate, dissolve or wind up our operations, the holders of our Series A Preferred Stock will have the right to receive $25.00 per share, plus all accrued and unpaid dividends (whether or not earned or declared) to and including the date of payment, before any payments are made to the holders of our common stock and any other of our junior shares. The rights of the holders of the Series A Preferred Stock to receive the liquidation preference will be subject to the proportionate rights of holders of each other future series or class of parity shares.

No maturity or mandatory redemption The Series A Preferred Stock does not have any stated maturity date and will not be subject to any sinking fund or mandatory redemption provisions, except, under some circumstances upon a Change of Ownership or Control as described above. Accordingly, the shares of Series A Preferred Stock will remain outstanding indefinitely unless we decide to redeem them or purchase all or a portion of the shares in the open market. We are not required to set aside funds to redeem the Series A Preferred Stock.

Optional redemption: We may not redeem the Series A Preferred Stock prior to June 30, 2012, except pursuant to the special redemption upon a Change of Ownership or Control discussed above. On and after June 30, 2012, we may redeem the Series A Preferred Stock for cash at our option, in whole or from time to time in part, at a redemption price of $25.00 per share, plus accrued and unpaid dividends (whether or not earned or declared) to the redemption date.

Voting rights: Holders of the Series A Preferred Stock will generally have no voting rights. However, if cash dividends on any outstanding Series A Preferred Stock are in arrears for any six consecutive or non-consecutive quarterly dividend periods, or if we fail to maintain a national market listing, the holders of the Series A Preferred Stock, voting separately as a class with holders of all other series of parity preferred shares upon which like voting rights have been conferred and are exercisable, will have the right to elect two directors to serve on our board of directors in addition to those directors then serving on our board of directors until such time as the national market listing is obtained or the dividend arrearage is eliminated. In addition, certain changes that would be materially adverse to the rights of holders of the Series A Preferred Stock cannot be made without the affirmative vote of holders of at least a majority of the outstanding shares of Series A Preferred Stock and all other shares of preferred stock similarly affected and entitled to vote, voting as a single class.

Full Prospectus PDF », DBLE Page »

Series:A
Redeemable?:Yes
Call Date:6/30/2012 (Now Trading Post Call Date)
Perpetual?:Yes
Cumulative?:Yes
Shares Offered:1400000
Overallotment:210000
Liquidation Preference:$25
Original Coupon:9.25%
Pay Period:Quarterly
Pay Dates:31-Mar, 30-Jun, 30-Sep, 31-Dec
CDx3 Compliance Rating: Learn DBLEP's Rating
Double Eagle Petroleum is an independent energy company engaged in the exploration, development, production and sale of natural gas and crude oil, primarily in Rocky Mountain Basins of the western U.S. Co.'s main properties are located in southwestern Wyoming. Co. has coal bed methane reserves and production in the Atlantic Rim Area of the eastern Washakie Basin and tight gas reserves and production on the Pinedale Anticline in the Green River Basin of Wyoming. Co. also has an active exploration project to pursue hydrocarbons in the Niobrara formation in the Atlantic Rim. At Dec 31 2012, Co. had estimated proved reserves of 256,144 barrels of oil and 76.59 billion cubic feet of natural gas.

Preferred: DBLEP


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Name:  Escalera Resources Co
Website:  www.dble.com
Sector:  Oil & Gas Exploration & Production

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