PetroQuest Energy Inc. in Lafayette has reached an agreement with lenders that gives it a second grace period on an overdue payment on its debt.

The company decided last month to preserve liquidity by not making $14.2 million in semi-annual interest payments that were due Aug. 15. The company had said the decision would not be a default on its debt, but could become a default if the payments were not made within a 30-day grace period.

Petroquest said Friday that an administrative agent and lenders agreed not to take any immediate action as the grace period expired, but that the forbearance agreements will expire on Sept. 28 or the "occurrence of certain events" specified in the agreements.

PetroQuest said it is continuing to evaluate various alternatives regarding its capital structure and financial position, which may include private debt exchanges or filing for protection under Chapter 11 of the U.S. Bankruptcy Code. In addition, the company is in continuing discussions and negotiations with the creditors and their legal and financial advisers regarding alternatives. 

PetroQuest noted that it has repaid $32.5 million on $50 million of debt, and still has nearly $25 million of cash on hand. The company said it is continuing to pay suppliers and trade creditors and fund its operations.

The company said it does not intend to disclose or comment on developments until its board of directors has approved a specific alternative or transaction or determined that further disclosure is appropriate.

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The oil and gas production company has been pummeled in recent years by low oil prices, like other energy companies. In early May, the New York Stock Exchange delisted PetroQuest because its market capitalization fell below $15 million for a 30-day period.

Seaport Global Securities, an investment bank with offices in New Orleans, is serving as PetroQuest's financial adviser, while Porter Hedges LLP, of Houston, is its legal adviser.

Editor's note: This story was changed Sept. 16, 2018, to correct the amount of time PetroQuest has for debt negotiations.