MIDLAND, Texas, June 14, 2019 /PRNewswire/ -- Legacy
Reserves Inc. (NASDAQ: LGCY) ("Legacy", and collectively with its
subsidiaries, the "Company") announced today that its board of
directors has approved, and the Company has executed, a global
restructuring support agreement (the "Global RSA") with its lenders
under its reserve based revolving credit facility ("RBL Lenders"),
its lenders under its second lien term loan ("Second Lien
Lenders"), and a group of the Company's unsecured noteholders (the
"Noteholder Group"). The proposed financial restructuring
will provide the Company with go-forward liquidity and a
right-sized pro forma capital structure while minimizing
operational disruptions by ensuring trade creditors will be paid in
full.
The Company previously announced that it executed a
restructuring support agreement with the RBL Lenders and Second
Lien Lenders on June 10, 2019, but
was continuing active discussions with the Noteholder Group
regarding the terms for their support of the Company's financial
restructuring. The Global RSA represents a broad agreement of
creditor constituencies across all tranches of the Company's
capital structure on the terms of a pre-arranged plan of
reorganization (the "Plan") that the parties have agreed to
support. The Global RSA contemplates a $256.3 million backstopped equity commitment and
rights offering, $500 million in
committed exit financing from certain of the existing RBL Lenders,
the equitization of approximately $797.2
million of principal outstanding debt, a potential
additional equity investment of $125
million, and payment in full of the Company's trade and
other unsecured creditors. The Company expects to file
voluntary petitions for reorganization in the United States Bankruptcy Court for the
Southern District of Texas (the
"Court") to facilitate the financial restructuring and implement
the Plan contemplated by the Global RSA. Consummation of the
Plan, including the infusion of new equity, will be subject to
confirmation by the Court in addition to the other conditions to be
set forth in the Plan and related transaction documents.
As previously announced, the Company will continue to operate
its business in the normal course without material disruption to
its vendors, partners or employees, and expects to have sufficient
liquidity to meet its financial obligations during the
restructuring. The Company has secured commitments for
debtor-in possession ("DIP") financing from certain of its existing
RBL Lenders, including Wells Fargo Bank, National Association that,
subject to Court approval, will refinance portions of the Company's
existing reserve-based credit facility and provide an additional
$100 million of revolving, new money
financing to support the Company's day-to-day operations and
finance the restructuring process.
Dan Westcott, Chief Executive
Officer of the Company, said, "After exploring all options and
months of negotiations, we are very pleased to have reached an
agreement for a consensual restructuring with our RBL Lenders,
Second Lien Lenders and the Noteholder Group. We believe that
the restructuring contemplated by the Global RSA will provide us
with the capital structure and liquidity to compete and grow in
today's challenging oil and gas environment. We plan to continue
working with our creditor constituencies to move through the
restructuring process expeditiously with minimal operational
disruptions."
Perella Weinberg Partners and its affiliate, Tudor Pickering
Holt & Co., is acting as financial advisor for the Company,
Sidley Austin LLP is acting as legal advisor, and Alvarez &
Marsal is acting as restructuring advisor. PJT Partners LP is
acting as financial advisor the Second Lien Lenders, and Latham
& Watkins LLP is acting as legal advisor. Houlihan Lokey
is acting as financial advisor for the Noteholder Group, and
Davis Polk & Wardwell LLP is
acting as legal advisor. RPA Advisors, LLC is acting as
financial advisor to Wells Fargo Bank, as administrative agent for
the RBL Lenders, and Orrick
Herrington & Sutcliffe LLP is acting as legal
advisor.
For inquiries regarding the restructuring, please call the
hotline established by the Company's noticing agent, Kurtzman
Carson Consultants LLC, at (866) 967-0495 (toll-free domestic) or
(310) 751-2695 (international).
About Legacy Reserves Inc.
Legacy Reserves Inc. is an independent energy company engaged in
the development, production and acquisition of oil and natural gas
properties in the United States. Its current operations are
focused on the horizontal development of unconventional plays in
the Permian Basin and the cost-efficient management of
shallow-decline oil and natural gas wells in the Permian Basin,
East Texas, Rocky Mountain and
Mid-Continent regions. Additional information regarding the
Company is available at www.legacyreserves.com.
Forward-Looking Statements
This press release may include "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts,
included in this press release that address activities, events or
developments that the Company expects, believes or anticipates will
or may occur in the future, are forward-looking statements. Words
such as "anticipates," "expects," "intends," "plans," "targets,"
"projects," "believes," "seeks," "schedules," "estimated," and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties, factors and risks, many of which are outside the
control of the Company, which could cause results to differ
materially from those expected by management of the Company. Such
risks and uncertainties include, but are not limited to, the
Company's ability to obtain Bankruptcy Court approval with respect
to motions or other requests made to the Bankruptcy Court; the
ability of the Company to negotiate, develop, confirm and
consummate a plan of reorganization; the ability of the Company to
consummate the rights offering and obtain the funding under
backstop commitment agreements; the effects of the chapter 11 cases
on the Company's liquidity or results of operations or business
prospects; the effects of the bankruptcy filing on the Company's
business and the interests of various constituents; the length of
time that the Company will operate under chapter 11 protection;
risks associated with third-party motions in the chapter 11 cases;
realized oil and natural gas prices; production volumes, lease
operating expenses, general and administrative costs and finding
and development costs; future operating results; and the factors
set forth under the heading "Risk Factors" in Legacy Reserves
Inc.'s filings with the U.S. Securities and Exchange Commission,
including its Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. The reader should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. Unless legally required,
the Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Contact:
Legacy Reserves Inc.
Robert L. Norris
Chief Financial Officer
432-689-5200
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SOURCE Legacy Reserves Inc.