Rosehill Resources Inc. and Rosehill Operating Co. LLC have commenced voluntary Chapter 11 cases under the United States Bankruptcy Code in the US Bankruptcy Court for the Southern District of Texas pursuant to terms of a restructuring support agreement (RSA).
The RSA, reported July 1, includes lenders under Rosehill’s revolving first lien credit facility, holders of Rosehill’s second lien notes and the company’s Series B Preferred Stock, and Tema Oil and Gas Co., as the holder of 66.8% of the equity interests in the company and 35.2% of the equity interests in Rosehill Operating and party to the company’s Tax Receivable Agreement (consenting creditors).
In connection with the Chapter 11 cases, the Delaware basin-focused Rosehill filed customary motions authorizing it to proceed with its operations in the ordinary course, including to enter into a $17.5 million junior convertible secured debtor-in-possession (DIP) delayed-draw term loan facility and use cash collateral.
Rosehill currently expects that the DIP facility will provide sufficient liquidity to meet its financial obligations during the duration of the Chapter 11 cases and it expects to continue to operate its business during the cases without material disruption to its vendors, partners, or employees.
In its last quarterly report, fourth-quarter 2019, the Rosehill Resources incurred a net loss of $17.5 million as compared to net income of $50.2 million in fourth-quarter 2018.
As of Dec. 31, 2019, Rosehill had $3.0 million in cash on hand and $355.5 million in long-term debt, net of discounts. Liquidity comprised of cash on hand and availability under its revolving credit facility was $83.0 million at Dec. 31, 2019. On March 19, 2020, Rosehill fully drew the amount available under its revolving credit facility. After the draw, Rosehill’s total debt under its credit facility increased to $340 million with total cash on hand of $73 million as of Mar. 19.