Samson Resources Corp., the Tulsa-based shale producer backed by US multinational private equity firm KKR & Co., filed for bankruptcy on Sept. 16.
As part of its restructuring and recapitalization, Samson’s second lien lenders, together with the second lien lenders that are backstopping the equity rights offering, will own substantially all of the equity in the reorganized company and all second lien lenders will have the right to participate in the new money investment.
The company also has obtained a commitment from second lien lenders—including Silver Point, Cerberus, and Anschutz—to provide at least $450 million of new capital to increase liquidity post-reorganization and permanently pay down existing first lien debt. This investment may be increased under certain circumstances to $485 million to further bolster liquidity.
Samson filed a series of motions that, pending court approval, will allow the company to operate its business in the ordinary course throughout the Chapter 11 process.
The first day motions will allow the company to continue producing oil and gas from its existing operations, pay employee wages, honor existing employee benefit programs, and pay royalties to mineral owners under the current terms of these agreements.
Samson’s assets encompass the Haynesville and Bossier shale plays and Cotton Valley reservoir in the East Texas and Northern Louisiana region; Granite Wash and Mississippi Lime, Tonkawa, and Marmato plays in the Midcontinent region; and Williston, Powder River, Green River, and San Juan basins in the Rockies region.
Sabine Oil & Gas Corp. and Quicksilver Resources Inc. are among other notable Chapter 11 filings during the current downturn (OGJ Online, June 15, 2015; Sept. 18, 2015).
