Halcón Resources has emerged from bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
By successfully completing its financial restructuring, the company eliminated more than $750 million in debt and more than $40 million of annual interest expense, significantly enriching its financial condition. Effective at emergence, the company has $147 million in availability under its new senior secured revolving credit facility, including $3 million in cash, $1 million in outstanding letters of credit and $130 million of borrowing, resulting in 1.3x total net leverage
According to a related 8-K filing, Bank of Montreal is serving as administrative agent for a $750 million exit facility. The exit facility will have an initial borrowing base of $275 million and a maturity date of October 8, 2024. Until the maturity date, the loans will bear interest at a rate per annum equal to (i) the alternative base rate plus an applicable margin of 1.00% to 2.00%, based on the borrowing base utilization percentage (as defined in the exit credit agreement) or (ii) adjusted LIBOR plus an applicable margin of 2.00% to 3.00%, based on the borrowing base utilization percentage. Any undrawn amounts under the exit facility will be subject to a commitment fee at a rate per annum equal to 0.375% to 0.500%, based on the borrowing base utilization percentage.
“I’m excited to announce our emergence from bankruptcy under Chapter 11. This has been the culmination of a lot of hard work from the entire team, including our legal and financial advisors. I especially want to thank our former board members for their role in making the financial restructuring a success. I am eager to begin working with our new board as we continue to implement a culture of capital discipline in the safe development of our asset base. We remain focused on creating value and enhancing the financial flexibility we have achieved in this process,” said Richard Little, Halcón’s CEO.
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The company has appointed Daniel P. Rohling as executive vice president and chief operating officer. Rohling replaces Jon Wright, who previously served in that role. Mr. Rohling has approximately 15 years of oil and gas operations experience and was most recently the asset vice president at Ajax Resources, until it sold substantially all of its assets to Diamondback Energy.
Perella Weinberg Partners and Tudor Pickering Holt acted as financial advisors, Weil, Gotshal & Manges acted as legal counsel, and FTI Consulting acted as restructuring advisor to the company in connection with the plan of reorganization. Ducera Partners acted as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisor to holders of the company’s prepetition senior notes.
Halcón Resources is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the U.S.
