Sundance Energy Takes Action to Strengthen Balance Sheet and Position Business for Sustained Future Success, Commences Financ...
10 3월 2021 - 12:07PM
Sundance Energy Inc. (NASDAQ: SNDE) and its affiliates (“Sundance”
or the “Company”), an onshore independent oil and natural gas
company focused on the development of large, repeatable resource
plays in North America, today announced that it has filed for
voluntary Chapter 11 protection in the U.S. Bankruptcy Court for
the Southern District of Texas to effectuate a transaction that
will strengthen the Company’s balance sheet and best position
Sundance for sustained future success. All operations will continue
as usual without interruption and the Chapter 11 process is
expected to conclude in approximately 60 days.
On March 9, 2021, Sundance entered into a Restructuring Support
Agreement (the “RSA”) with the administrative agent under its
prepetition reserve-based revolving credit facility (the “RBL
Facility”), holders of 100% of the outstanding principal amount of
revolving loans under the RBL Facility, the administrative agent
under the prepetition term loan (the “Term Loan Facility”), and
holders of 100% of the outstanding principal amount of term loans
under the Term Loan Facility, whereby the parties agreed to support
the Company’s prepackaged plan of reorganization (the “Prepackaged
Plan”) under Chapter 11 of the U.S. Bankruptcy Code. The
Prepackaged Plan provides for a debt-for-equity exchange that will
eliminate over $250 million of funded debt obligations from the
Company’s balance sheet. Implementation of the Prepackaged Plan
will strengthen Sundance’s financial structure, allowing it to
focus on core competencies without the burden of servicing
significant debt levels.
With the significant support of its lenders, implementation of
the Prepackaged Plan will enable the Company to quickly and
efficiently recapitalize its balance sheet and reorganize as a
private entity with no material impact on the majority of its
creditors. Under the Prepackaged Plan, which remains subject to
approval by the Bankruptcy Court and consummation, existing equity
interests would be cancelled on the effective date and holders of
existing equity interests are not expected to receive any
consideration or distributions on account of such interests.
The Company has also secured commitments from certain of its
Term Loan lenders for at least $45 million in debtor-in-possession
(“DIP”) financing that, along with normal operating cash flows and
the consensual use of cash collateral, will fund normal-course
operations and reorganization expenses. Upon emergence, the
Company’s recapitalized balance sheet will include (i) $137.5
million of funded indebtedness comprising a senior secured
reserve-based revolving credit facility, a senior secured second
out term loan, and, if necessary, a senior secured third out term
loan, in each case provided by the existing RBL Facility lenders
and (ii) new common equity interests issued in exchange for DIP
financing claims and Term Loan claims, subject to dilution by new
common equity interests granted under a new management incentive
plan.
“Sundance has faced numerous challenges in the last few years
resulting in declining cash flow and liquidity that have only been
exacerbated by the unprecedented COVID-19 pandemic and volatility
in the market price of crude oil and natural gas,” said Eric
McCrady, Sundance’s Chief Executive Officer. “As a result, we are
taking decisive action to address these challenges and deleverage
our balance sheet to best position our business for sustained
future success. We are grateful for the support of our lenders
throughout this process and anticipate that the consensus already
achieved will simplify our path through Chapter 11 and enable us to
emerge with a strengthened financial structure.”
Sundance expects to continue operations uninterrupted through
the Chapter 11 process. The Company has filed customary motions
with the Bankruptcy Court seeking authority for Sundance to
continue operations in the ordinary course, including, but not
limited to, paying employees and continuing existing benefit
programs, paying royalty owners and vendors in the normal course,
and meeting commitments to customers, including crude buyers. The
Company has also filed a customary motion seeking to implement
equity trading procedures in an effort to preserve the value of the
Company’s tax attributes. Such motions are typical in the Chapter
11 process and Sundance anticipates that they will be heard and
approved in the first few days of the Chapter 11 cases. In
addition, the RSA and Prepackaged Plan contemplate that unsecured
trade creditors will be paid in full under the Prepackaged
Plan.
For more information about the Company’s Chapter 11 case, please
visit https://cases.primeclerk.com/sundanceenergy or contact Prime
Clerk, the Company’s noticing and claims agent, at (877) 470-4340
for U.S./Canadian calls or (347) 919-5764 for international calls,
or by emailing Sundanceinfo@primeclerk.com.
Sundance is represented in this matter by Latham & Watkins
LLP, Hunton Andrews Kurth LLP, Miller Buckfire & Co., LLC, and
FTI Consulting Inc.
About Sundance Energy Inc.
Sundance Energy Inc. is an independent energy exploration and
production company located in Denver, Colorado. The Company is
focused on the acquisition and development of large, repeatable oil
and natural gas resource plays in North America. Current activities
are focused in the Eagle Ford. A comprehensive overview of the
Company can be found on Sundance’s website at
www.sundanceenergy.net.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain forward-looking statements
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
identified by the use of the words “project,” “believe,”
“estimate,” “expect,” “anticipate,” “intend,” “contemplate,”
“foresee,” “would,” “could,” “plan,” and similar expressions that
are intended to identify forward-looking statements, which are
generally not historical in nature. These forward-looking
statements are based on management’s current expectations and
beliefs concerning future developments and their potential effect
on Sundance. While management believes that these forward-looking
statements are reasonable as and when made, there can be no
assurance that future developments affecting Sundance will be those
that are anticipated. Sundance’s forward-looking statements involve
significant risks and uncertainties (some of which are beyond
Sundance’s control) and assumptions that could cause actual results
to differ materially from Sundance’s historical experience and
present expectations or projections. These include, but are not
limited to, risks or uncertainties associated with our ability to
consummate the transactions associated with the Company’s current
bankruptcy court proceeding, our ability to obtain in a timely
manner confirmation of a successful plan of reorganization in the
Company’s current bankruptcy court proceeding and general economic
and business conditions, including the continued impact of the
COVID-19 pandemic. You are cautioned not to place undue reliance on
forward-looking statements contained in this press release, which
speak only as of the date of this press release. Forward-looking
statements also are affected by the risk factors described in
Sundance’s 10-K filing for the fiscal year ended December 31, 2019,
as may be amended, and those set forth from time-to-time in other
filings with the SEC. Sundance undertakes no obligation to publicly
update or revise any forward-looking statements after the date they
are made, whether as a result of new information, future events or
otherwise.
For more information, please contact:
Cathy AndersonExecutive Vice President, Chief Financial Officer
& TreasurerTel: (303) 407-0471canderson@sundanceenergy.net
For media inquiries, please contact:
FTI ConsultingAngelo Thalassinos / Sarah
RosseletSundanceEnergyMedia@fticonsulting.com
Sundance Energy (NASDAQ:SNDE)
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