Unit Corporation emerged from Chapter 11 bankruptcy protection, marking the completion of the company’s financial restructuring process along with the implementation of the company’s plan of reorganization, which was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on Aug. 6.
“Our successful financial restructuring positions us to handle current challenges in the oil and gas industry and realize the potential of our company,” David T. Merrill, president and CEO of Unit Corporation, said. “We look forward to continuing to enhance our financial strength and using our strengths, teamwork and focus to improve our performance as a company. On behalf of the company and newly appointed board of directors, I would like to express our gratitude to our employees for their continued hard work and dedication during this process.”
Under the plan of reorganization, Unit will complete a debt-for-equity exchange with the holders of the company’s previous 6.625% senior subordinated notes (subordinated notes) and will exchange its prior common stock (old common stock) for warrants to purchase its new common stock. As part of the plan, Unit converted its existing credit facility agented by BOKF into a $140 million reserve-based lending revolving loan and $40 million term loan. BOKF remains the administrative agent for this exit credit agreement, which also is committed by all lenders under the previous facility. Additionally, Unit will have reduced its unsecured debt liabilities, further bolstering its balance sheet.
The maturity date of borrowings under the exit credit agreement is March 1, 2024. As of Sep. 3, 2020, Unit had $40 million in principal amount of term loans outstanding under the term loan facility, approximately $92 million in principal amount of revolving loans outstanding under the RBL Facility and approximately $6.7 million of outstanding letters of credit.
Vinson & Elkins served as legal advisor, Evercore Group served as investment banker and Opportune served as restructuring advisor to Unit.
Weil, Gotshal & Manges served as legal advisor and Greenhill & Co. served as financial advisor to an ad hoc group of holders of subordinated notes.
Unit Corporation is a Tulsa, OK-based energy company engaged through its subsidiaries in oil and gas exploration, production, contract drilling, and natural gas gathering and processing.
