Halcon Resources (f/k/a/ RAM Energy Resources) and more than 20 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-11724. The Company, which is focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets, is represented by Robert S. Brady and Joseph M. Smolinsky of Young Conaway Stargatt & Taylor and Weil, Gotshal & Manges, respectively.
Concurrent with the petition, Halcon Resources also filed with the Court a Joint Prepackaged Plan of Reorganization and related Disclosure Statement. The Company recently announced its entry into a restructuring support agreement (RSA) with certain of its 13.0% 3rd Lien Notes due 2022, its three tranches of senior unsecured notes comprised of its 9.75% Senior Notes due 2020, its 8.875% Senior Notes due 2021 and its 9.25% Senior Notes due 2022, its 8.0% Convertible Note due 2020 and its 5.75% Series A Perpetual Convertible Preferred Stock.
According to documents filed with the Court, “The Restructuring will leave the Debtors’ business intact and substantially de-levered, providing for the reduction of approximately $1.8 billion of the Debtors’ existing net debt and approximately $200.0 million of the Debtors’ annual cash interest expense upon the completion of the Restructuring. This deleveraging will enhance the Debtors’ long-term growth prospects and competitive position and allow the Debtors to emerge from their chapter 11 cases…as reorganized entities better positioned to withstand depressed oil and natural gas prices. In addition, the Restructuring will allow the Debtors’ management team to focus on operational performance and value creation. A significantly-improved balance sheet will enable the Reorganized Debtors to pursue value-creating acquisitions in a depressed commodity price environment. Post-Restructuring, the Debtors anticipate having access to capital markets that are not available to them today. Furthermore, by enhancing their capital structure, the Debtors will have the ability to accelerate drilling activity if prices recover.”
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