HOUSTON, Feb. 2, 2017 /PRNewswire/ -- Vanguard
Natural Resources, LLC (NASDAQ: VNR) (together with its wholly
owned subsidiaries, collectively, "Vanguard" or the "Company")
today announced that the Company has voluntarily filed petitions
for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of Texas, Houston Division (the "Court").
In connection with the chapter 11 filing, Vanguard has
entered into a Restructuring Support Agreement with certain
consenting holders (the "Restructuring Support Parties) of the
Company's 7.875% Senior Notes due 2020 (the "Senior Notes due
2020"), 8 3/8% Senior Notes due 2019 (the "Senior Notes due 2019")
and 7.0% Senior Secured Second Lien Notes due 2023 (the "Second
Lien Notes").
Under the Restructuring Support Agreement, the Restructuring
Support Parties agreed to support a plan of reorganization for the
Company that would include (i) a fully committed $19.25 million equity investment by the
consenting holders of the Second Lien Notes; and (ii) a
$255.75 million rights offering that
is fully backstopped by the consenting holders of the Senior Notes
due 2020 and Senior Notes due 2019. Through the implementation of
the transactions set forth in the Restructuring Support Agreement,
the Company would eliminate approximately $708 million in debt under the Company's
reserve-based credit facility and senior unsecured debt.
The Company has obtained a committed $50
million debtor-in-possession ("DIP") financing facility
underwritten by Citibank, N.A., JPMorgan Securities LLC and Wells
Fargo Bank, N.A. Subject to Court approval, this DIP
financing, combined with the Company's cash from operations, is
expected to provide sufficient liquidity during the chapter 11
cases to support its continuing business operations and minimize
disruption.
Mr. Scott W. Smith, President and
CEO, commented, "We continue to believe in the quality of our asset
base and the dedication and competence of our office and field
employees. The depressed commodity price cycle which has
persisted over the past two years, combined with a tightened
regulatory environment for senior debt providers, has resulted in a
situation where, despite reducing our total debt by over
$500 million in 2016, we find
ourselves unable to meet the obligations of our current credit
facility. With a successful restructuring of our balance
sheet, Vanguard will be better positioned to weather this new lower
for longer commodity price environment, while also improving our
long-term financial security and better position us for long-term
success."
Vanguard has filed a series of motions with the court that, when
granted, will enable the company to maintain its operations as
usual, without interruption throughout the restructuring process.
Included in these first day motions are requests to continue to pay
employee wages, honor existing employee benefit programs and pay
royalties to mineral owners under the terms of the applicable
agreements.
The Company has also filed motions seeking authority to pay
expenses associated with production operation and drilling and
completion activities, as well as costs associated with gathering,
processing, transportation, marketing and those related to joint
interest billing for non-operated properties.
Court filings and other information related to the chapter 11
cases are available on the Company's website at
www.vnrllc.com/restructuring and at
http://cases.primeclerk.com/vanguard, which is a website
administered by the Company's proposed claims agent, Prime Clerk
LLC. The Company has also set up a toll-free hotline to answer
employee, vendor, investor and royalty owner questions, which is
available Monday through Friday, 8 a.m. to 6
p.m. Central Standard Time at 844-596-2260 (internationally
at 929-333-8976). Parties may obtain electronic notification
of court filings through the Prime Clerk website or may register
for email notices by completing the Bankruptcy Court's registration
form that can be accessed at
http://www.txs.uscourts.gov/sites/txs/files/CRECFform.pdf.
Paul Hastings LLP is serving as legal counsel and Evercore
Partners is acting as financial advisor to Vanguard. Opportune LLP
is the Company's restructuring advisor.
About Vanguard Natural Resources, LLC
Vanguard Natural Resources, LLC is a publicly traded
limited liability company focused on the acquisition, production
and development of oil and natural gas properties. Vanguard's
assets consist primarily of producing and non-producing oil and
natural gas reserves located in the Green River
Basin in Wyoming, the Permian
Basin in West Texas and New Mexico,
the Piceance Basin in Colorado, the Gulf Coast
Basin in Texas, Louisiana, Mississippi and
Alabama, the Arkoma
Basin in Arkansas and Oklahoma, the Big Horn Basin
in Wyoming and Montana, the Williston
Basin in North Dakota and Montana, the
Anadarko Basin in Oklahoma and North
Texas, the Wind River Basin in Wyoming, and
the Powder River Basin in Wyoming. More information
on Vanguard can be found at www.vnrllc.com.
Forward-Looking
Statements
We make statements in this news release that are considered
forward-looking statements within the meaning of the Securities
Exchange Act of 1934. These forward-looking statements are largely
based on our expectations, which reflect estimates and assumptions
made by our management. These estimates and assumptions reflect our
best judgment based on currently known market conditions and other
factors. Although we believe such estimates and assumptions to be
reasonable, they are inherently uncertain and involve a number of
risks and uncertainties that are beyond our control. In addition,
management's assumptions about future events may prove to be
inaccurate. Management cautions all readers that the
forward-looking statements contained in this news release are not
guarantees of future performance, and we cannot assure you that
such statements will be realized or the forward-looking events and
circumstances will occur. Actual results may differ materially from
those anticipated or implied in the forward-looking statements due
to factors listed in the "Risk Factors" section in our SEC filings
and elsewhere in those filings. All forward-looking statements
speak only as of the date of this news release. We do not intend to
publicly update or revise any forward-looking statements as a
result of new information, future events or otherwise.
The Company cautions that trading in the Company's securities
during the pendency of the anticipated chapter 11 cases is highly
speculative and poses substantial risks. Trading prices for the
Company's securities may bear little or no relationship to the
actual recovery, if any, by holders of the Company's securities in
the chapter 11 cases.
Vanguard Natural Resources, LLC
Lisa Godfrey, (832) 327-2234
Director, Investor Relations
investorrelations@vnrllc.com
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SOURCE Vanguard Natural Resources, LLC