Vanguard Natural Resources announced that the company has voluntarily filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
The company has obtained a committed $130 million debtor-in-possession financing facility (DIP facility), which contemplates $65 million in new money, up to $20 million of which will become immediately available upon Bankruptcy Court approval and $65 million of which will roll up obligations in respect of revolving loans under the company's existing credit agreement. The DIP facility is underwritten by Citibank, N.A. Subject to court approval, this DIP financing, combined with the company's cash from operations, is expected to provide sufficient liquidity during the Chapter 11 cases to support its continuing business operations and minimize disruption.
R. Scott Sloan, President and CEO, commented, "The restructuring steps that we have announced today are necessary to attain a capital structure which is suitable for Vanguard's assets and future business strategy. We are now focused on expediting an efficient in-court restructuring, maintaining our operational momentum and upholding our obligations to our employees and vital vendors and stakeholders."
Vanguard has filed a series of motions with the court that, when granted, are expected to generally enable the company to maintain its operations as usual throughout the restructuring process.Included in these first day motions are requests to continue to pay employee wages, honor existing employee benefit programs, continue to pay taxes and pay royalties to mineral owners under the terms of the applicable agreements.
The company has also filed motions seeking authority to pay expenses associated with its operations and drilling and completion activities, as well as costs associated with gathering, processing, transportation, marketing and those related to joint interest billing for non-operated properties.
Kirkland & Ellis LLP is serving as legal counsel and Evercore Partners is acting as financial advisor to Vanguard. Opportune LLP is the company's restructuring advisor.
Vanguard Natural Resources, Inc. is an independent exploration and production company focused on the production and development of oil and natural gas properties in the United States. Vanguard's assets consist primarily of producing and non-producing oil and natural gas reserves located in the Green River Basin in Wyoming, the Piceance Basin in Colorado, the Permian Basin in West Texas and New Mexico, the Arkoma Basin in Oklahoma, the Gulf Coast Basin in Texas, Louisiana and Alabama, the Big Horn Basin in Wyoming and Montana, the Anadarko Basin in Oklahoma and North Texas, the Wind River Basin in Wyoming and the Powder River Basin in Wyoming.