Delphi Energy granted extension of stay under CCAA proceedings

By Wendy Van Sickle

Columbus, Ohio, May 8 – Delphi Energy Corp. was granted an extension of the stay period related to its proceedings under the Companies’ Creditors Arrangement Act to May 22 by the Court of Queen’s Bench of Alberta, according to a news release on Friday.

Delphi reports that Luminus Energy IE DAC, an affiliate of a pooled investment vehicle of Luminus Management, LLC, has purchased all of the rights of Delphi’s first-lien senior secured lenders, ATB Financial, Bank of Montreal and Bank of Nova Scotia, under Delphi’s credit facilities.

Luminus is a related party of Delphi which, through one or more of its pooled investment vehicles or affiliates thereof, holds 14,065,138 common shares, representing about 57% of Delphi’s outstanding common shares, and about $58.7 million principal amount of Delphi’s second lien senior secured notes, representing about 49% of the outstanding second lien senior secured notes, the company reported.

On April 24, Delphi received notice of the senior lenders’ intent to exercise their right to terminate the commodity swap contracts held by the company totaling $17.19 million. The proceeds were used to reduce the $31.8 million owed to the senior lenders.

“We view this as a very positive step forward in pursuit of an acceptable and timely solution for the remaining stakeholders, given the stated objective of certain members of the senior lending syndicate to terminate the relationship with the company,” David Reid, president and chief executive officer of Delphi, said in the release. “We now look forward to accelerating the process.”

The extension of the stay period is expected to allow for interim financing for the company to be negotiated and finalized, for a claims process to be prepared, and for the company, in consultation with Luminus and the monitor in the CCAA proceedings, to continue its restructuring efforts.

As part of this process, the company plans to pursue programs recently announced by the Federal and Provincial Governments in conjunction with the Business Development Canada and Export Development Canada to expand credit support for at-risk small and medium-sized energy companies.

Delphi said it also plans to pursue well abandonment funding from the Federal and Provincial Government programs, to continue to reduce its well abandonment obligations.

Delphi Energy is a Calgary, Alta.-based company that explores, develops and produces oil and natural gas in Western Canada.

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