EP Energy files petitions under Chapter 11

Oct. 4, 2019
EP Energy Corp., a Houston independent with programs in the Eagle Ford, Permian, and Northeastern Utah areas, filed voluntary petitions under Chapter 11 reorganization in the US Bankruptcy Court for the Southern District of Texas.

EP Energy Corp., a Houston independent with programs in the Eagle Ford, Permian, and Northeastern Utah areas, filed voluntary petitions under Chapter 11 reorganization in the US Bankruptcy Court for the Southern District of Texas.

The process will allow the company to pursue a reduction in debt to improve its long-term position, said Russell Parker, EP Energy president and chief executive officer, who said the company’s business operations are expected to continue without interruption throughout the process.

The company ended this year’s second quarter with $52 million in cash, $355 million in borrowings outstanding on the RBL Facility, and $27 million in letters of credit, resulting in $299 million of available liquidity and $4.6 billion of net debt. Subsequently, on Aug. 1, EP Energy borrowed $268 million under its RBL Facility.

“The company has reached an agreement in principle on a comprehensive restructuring with a number of its key creditors but made the decision that the protection of Chapter 11 would help the parties get the deal over the finish line,” Parker said. Over the coming days and weeks, he said, the company will work with creditors and stakeholders to propose a plan of reorganization.

In connection with the Chapter 11 filing, EP Energy has filed several customary motions with the court seeking authorization to support its operations while the process continues, including authority to continue to make payments to lessors and royalty owners in the ordinary course of business, including those payments that were made prior to Oct. 4. The company also expects to pay vendors in full for goods and services provided on or after Oct. 4.