Pacific Exploration & Production closed a debtor-in-possession financing in the amount of $500 million, less applicable fees and charges, with certain holders of the company’s senior unsecured notes and on behalf of investment funds managed by The Catalyst Capital Group.

As part of the DIP financing, the company issued 6.250 million warrants to the supporting noteholders that are exercisable at a nominal exercise price into common shares in the reorganized capital of the company upon completion of the restructuring transaction.

In addition, the company entered into a $115.5 million new letter of credit facility with certain lenders under the company’s pre-existing credit facilities, and together with the supporting noteholders.

The closing of the DIP financing and entering into of the letter of credit facility will further the company’s previously announced comprehensive restructuring transaction with the supporting creditors and Catalyst that will significantly reduce debt, improve liquidity and best position the company to navigate the current oil price environment.

The restructuring transaction has received support from approximately 79% of the aggregate principal amount of the debt held by the company’s noteholders and lenders under the company’s credit facilities.

“The closing of the DIP financing and the entering into of the letter of credit facility are a significant milestone for the restructuring transaction. We continue to work constructively with the supporting noteholders, Catalyst and other stakeholders to ensure that Pacific emerges from creditor protection as a stronger, more efficient company,” said Dennis Mills, chair of the Independent Committee.