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Midstates Petroleum Company Plan Filed

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Midstates Petroleum Company filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The Plan will significantly reduce the Debtors’ leverage through, among other things, a modification of the terms of the First Lien Credit Facility and the equitization of all of the debt junior to the First Lien Credit Facility….The Plan contemplates the following distributions to Holders of Allowed Claims and Interests: holders of priority, Lien Trade Claims…and secured claims (other than secured claims arising under the First Lien Credit Facility, the Second Lien Notes, or the Third Lien Notes) will be paid in full, in cash; First Lien Lenders will receive (i) approximately $82 million in cash and (ii) a new credit facility in the amount of $170 million (the ‘New Credit Facility’).”

The Disclosure Statement continues, “Second Lien Noteholders will receive: (i) cash in an amount equal to the Debtors’ cash on hand as of the Plan’s Effective Date, less cash payments and reserves to be funded under the Plan (including a $40 million cash collateral account to be funded in connection with the New Credit Facility) and $70 million of balance sheet cash, but in no event more than $60 million, and (ii) 96.3 percent of the New Common Stock in the Reorganized Parent (subject to dilution by the New Warrants and the Management Incentive Plan); Third Lien Noteholders will receive: (i) 2.5 percent of the New Common Stock in the Reorganized Parent (subject to dilution by the New Warrants and the Management Incentive Plan) and (ii) the New Warrants to acquire an additional 15 percent of such equity, which warrants will strike at a $600 million equity valuation for the New Common Stock and will expire 42 months after the Plan’s Effective Date; and Unsecured Noteholders and General Unsecured Creditors will receive their Pro Rata share of 1.2 percent of the New Common Stock of Reorganized Parent (the ‘Unencumbered Asset Equity Distribution’).”

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