Energy & Exploration Partners emerges from Chapter 11 bankruptcy case

By Caroline Salls

Pittsburgh, May 13 – Energy & Exploration Partners, Inc. emerged from Chapter 11 bankruptcy after completing all required actions and satisfying the remaining conditions to effectiveness of its plan of reorganization, according to a company news release.

The plan was confirmed by the U.S. Bankruptcy Court for the Northern District of Texas on April 26.

The company said it emerges from Chapter 11 having reduced its total debt by $1.1 billion and with a new capital structure that provides operational flexibility to enhance exploration and development of its assets in the East Texas stacked play.

Plan terms

As previously reported, the plan calls for the implementation of a debt-to-equity conversion of a substantial portion of the Energy & Exploration debtors’ pre-bankruptcy funded debt.

Pre-bankruptcy secured lenders will exchange their debt for a new $40 million term loan, 20% of new common interests in the reorganized debtors and rights offered in a $90 million rights offering.

Under the rights offering, holders of pre-bankruptcy secured claims will have the opportunity to purchase a share of a $90 million delayed-draw term loan, with $65 million anticipated to be funded on the effective date, and 80% of the new common interests. The exercise price per right will be $100,000.

Noteholders will exchange their unsecured convertible notes for a share of warrants exercisable for seven years into 0.7% of the reorganized company’s equity, struck assuming a cashless exercise at an equity value equal to $195 million less the total principal of debt outstanding as of the plan effective date.

General unsecured creditors will receive a share of $2.25 million in cash under the plan, as well as any proceeds from assigned estate claims.

Net proceeds from the assigned estate claims will be payable by a creditor trust, with the first $1 million to be paid to the reorganized company. After that, the proceeds will be paid to general unsecured creditors, other than deficiency claims of pre-bankruptcy secured lenders, until they recover a total of 15% of the allowed amount of their claims from creditor trust assets, and then to all holders of allowed general unsecured claims.

Holders of convenience claims will be paid in full in cash.

Preferred stock and existing interests will be extinguished without distribution.

Exit financing

In conjunction with its emergence from Chapter 11, Energy & Exploration also closed on its new $90 million senior secured credit facility, which the company said will provide sufficient liquidity after satisfying debtor-in-possession obligations and other restructuring related expenses.

Credit Suisse AG, Cayman Islands Branch is the administrative agent for the exit financing.

The facility will mature in 5˝ years.

All interest expenses related to this credit facility will be payable in kind at a rate of 13%.

“The new credit facility gives ENXP adequate liquidity and flexibility to further invest in its business and to fund its strategic plan,” the release said.

Interim CEO

Peter Hill has been appointed to the role of interim chief executive officer. He succeeds B. Hunt Pettit, who left the company last month after founding it in 2006.

“With a stronger balance sheet, access to liquidity and a renewed sense of purpose and focus on simplification, execution and development, I am confident we can capitalize on the value this enterprise is capable of achieving,” Hill said in the release.

The company has been advised throughout this process by the law firm of Bracewell LLP, investment bank Evercore, financial adviser AP Services, LLC, as well as Prime Clerk LLC and EnerCom, Inc.

Energy & Exploration Partners is an oil and natural gas exploration and production company based in Fort Worth, Texas. The company filed for bankruptcy on Dec. 7 under Chapter 11 case number 15-44931.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.