Samson amended plan calls for debt-for-equity swap and asset sales

By Caroline Salls

Pittsburgh, May 17 – Samson Resources Corp. filed an amended plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of Delaware that has the support of its first-lien agent and a steering committee of first-lien lenders and calls for a restructuring through a debt-for-equity conversion and asset sales.

The company said it began talks with other creditor constituencies after the second-lien lenders said they were no longer willing to support and sponsor a second-lien-led restructuring as of January.

Samson said the plan terms include:

• An exchange of first-lien claims for new first-lien debt, including commitments under a new reserve-based revolving credit facility, cash, including proceeds from any asset sales, and new common equity;

• Resolution of the first-lien lenders’ adequate protection claims so the allowed amount of those claims will be materially less than that which the lenders likely could assert based on the diminution in value of their cash collateral to date;

• Distribution to holders of general unsecured claims of their share of up to 5% of new common stock in the reorganized company and proceeds of some unencumbered assets;

• At least $100 million of liquidity available to the reorganized debtors, including cash and availability under the new first-lien debt;

• Parent company interests will be extinguished with no distribution; and

• Releases of claims against the debtors, the first-lien and second-lien agent and lenders, each of the sponsors, the official committee of unsecured creditors, senior noteholders and the senior notes indenture trustee.

In connection with the possible asset sales, Samson said it will seek approval to set a first-round bid deadline of May 27, a second-round bid deadline of June 20, a deadline to file a bid procedures motion of July 1, a final competing bid deadline of Aug. 12, an Aug. 19 auction and an Aug. 26 sale hearing.

Plan comparison

As previously reported, the terms of the company’s original plan included the following:

• A new money investment of a minimum of $450 million, consisting of a minimum amount of $325 million in new common equity in the reorganized company and a maximum of $125 million of new second-lien debt of the reorganized company, to be raised through a rights offering available to all second-lien lenders.

If the company’s liquidity was projected to be less than $350 million as of the effective date, an accordion provided for an additional investment of new common equity and new second-lien debt of $35 million by the second-lien lenders who elected to participate in the rights offering.

• An exit first-lien revolving credit facility would be a reserve-based revolving credit facility with a borrowing base of at least $750 million on the plan effective date;

• The second-lien lenders would receive all of the new common equity in the reorganized company, less the new common equity issued to the rights offering participants, the backstop parties and the holders of allowed general unsecured claims and subject to dilution by new common equity issued in connection with a management incentive plan;

• Holders of allowed general unsecured claims, including senior unsecured notes claims, would receive 1% of the reorganized common equity if they vote for the plan and 0.5% if they do not, subject to dilution on account of the management incentive program;

• Holders of parent company interests would receive no distribution; and

• In consideration for the sponsors’ agreement to support the plan and restructuring, including by cooperating to preserve the company’s valuable tax attributes, the plan included a mutual release between the second-lien lenders that signed the agreement and the sponsors and a release of the sponsors by Samson.

Based in Tulsa, Okla., Samson is the largest privately held crude oil and natural gas company in the United States. The company filed for bankruptcy Sept. 16, 2015 under Chapter 11 case number 15-11934.

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