Sabine Oil & Gas Corporation announced that on June 30, 2015, it signed an amendment to its previously announced forbearance agreement with the lenders under its revolving credit facility. The amended forbearance agreement will provide the company with additional flexibility as it continues discussions with its creditors and their respective professionals regarding the company's debt and capital structure.
Pursuant to the amendment to the forbearance agreement, the lenders under the revolving credit facility have agreed to forbear from exercising remedies until the earlier of (i) certain events of default under the forbearance agreement or revolving credit facility, (ii) the acceleration or exercise of remedies by any other lender or creditor and (iii) July 15, 2015 (the "Forbearance Period"), with respect to the company's currently existing events of default under the revolving credit facility. In exchange for agreeing to forbear, the company has agreed during the Forbearance Period to (i) further limit its ability to sell assets, (ii) undertake efforts to appoint a chief restructuring officer, (iii) implement procedures to segregate the proceeds of collateral under the revolving credit facility and (iv) pay a forbearance fee equal to $500,000.
As previously announced, Sabine has retained financial advisors, Lazard, and legal advisors, Kirkland & Ellis LLP, to advise management and the board of directors on strategic alternatives related to its capital structure. Sabine believes it is in the best interests of its stakeholders to actively address the company's debt and capital structure and is continuing discussions with its creditors and their respective professionals. As previously reported, as of May 8, 2015, the company had a cash balance of approximately $276.9 million, which provides substantial liquidity to fund its current operations. The company is continuing to pay suppliers and other trade creditors in the ordinary course.
Additional information about the amendment to the forbearance agreement can be viewed here.
Sabine Oil & Gas Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States. Sabine's current operations are principally located in the Cotton Valley Sand and Haynesville Shale in East Texas, the Eagle Ford Shale in South Texas, the Granite Wash in the Texas Panhandle and the North Louisiana Haynesville.