Name: Another Oklahoma energy company is seeking bankruptcy protection
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Another Oklahoma energy company is seeking bankruptcy protection

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sharesThe number of energy companies either headquartered or operating within Oklahoma filing for bankruptcy continues to climb.Gulfport Energy became the latest and at least the ninth just in the past couple of years to seek the assistance on Saturday, when it filed a case seeking Chapter 11 status in the U.S. Bankruptcy Court for the Southern District of Texas.Gulfport’s filing is based upon a Restructuring Support Agreement (RSA) its petition states it negotiated with lenders. It said the agreement also has been accepted by investors who hold more than two thirds of its senior unsecured debt. Plus, certain noteholders have committed to backstop a minimum new money investment of $50 million by agreeing to take convertible preferred stock in exchange.The company also proposes to issue $550 million of new senior unsecured notes under the plan to existing unsecured creditors of certain Gulfport subsidiaries.Gulfport intends to use the process to strengthen its balance sheet, restructure certain debt obligations, significantly reduce its midstream cost structure and achieve a more sustainable capital structure. Officials stated it intends to continue operating normally as the case continues, noting it has secured $262.5 million in financing from Gulfport’s existing lenders under its revolving credit facility. Gulfport also has received a commitment from its existing lenders to provide $580 million in exit financing upon emergence from Chapter 11, officials added.In the filing, company officials stated the bankruptcy will enable Gulfport to eliminate about $1.25 billion in debt, significantly reducing its future expected annual cash interest expenses.“Since Gulfport’s leadership team was reconstituted in 2019, we have taken decisive actions to streamline our business, strengthen our balance sheet, focus on cash flow generation, exercise capital discipline, and drive operational efficiencies and cost reductions across the company,” David M. Wood, Gulfport’s CEO, stated in a release announcing the filing.“Despite these efforts, our large legacy debt burden in addition to significant legacy firm transportation commitments created a balance sheet and cost structure that was unsustainable in the current market environment. After working diligently to explore all strategic and financial options available, Gulfport’s board of directors determined that commencing a Chapter 11 process is in the best interest of the company and its stakeholders.”Just the latestThe parade of bankruptcies involving public and private companies either headquartered or operating within Oklahoma kicked off in May 2019, when White Star Petroleum, once part of the late Aubrey McClendon’s American Energy Partners, sought bankruptcy protection to get out from under a significant amount of debt. Ultimately, its assets were acquired by Houston-based Contango Oil &amp; Gas for $132.5 million.In September 2019, Alta Mesa Resources, a company active in Oklahoma’s oil field, filed for bankruptcy with more than $1 billion in debt. Oklahoma City-based Mach Resources, backed by Bayou City Energy Partners, acquired its resources for about $160 million.More companies took their situations to court seeking to reorganize this year. In May of this year, Unit Corp. filed, seeking to shed more than $650 million in debt. That case, also filed in Texas’ southern district bankruptcy court, continues.June was particularly active.Privately owned and Tulsa-based Chisholm Oil and Gas Operating sought bankruptcy protection as it aimed to shed $517 million in debt. Court filings indicate a judge approved its final reorganization plan last month.Oklahoma City-based Templar Energy also declared bankruptcy, seeking to sell working interests it held in about 2,165 oil and gas wells across parts of northwestern Oklahoma and the Texas Panhandle to slash its debt. In August, its assets were acquired by Presidio Petroleum for $91 million.Then, Chesapeake Energy Corp. filed a bankruptcy case, after negotiating a restructuring agreement with most of its creditors that company officials asserted will create a path back to profitability. If its proposal ultimately is approved, Chesapeake would emerge from the process with a $2.5 billion line of credit. Earlier this month, the company agreed to offload its Anadarko Basin Mid-Continent assets through a bankruptcy-related auction for about $130.5 million to Oklahoma City-based Tapstone Energy.(Story continued below...)Sable Permian Resources, another company that originally was part of McClendon’s American Energy Partners, also sought bankruptcy protection in late June. Its case, which still is working its way through the court process, sought for it to obtain $150 million of financing to pay for continued operations as the bankruptcy continued.And in August, Oklahoma City-based Chaparral Energy filed for bankruptcy, and exited that process as a private operator in October with $35 million more in working capital.More on GulfportGulfport operates in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. Earlier this year, the company announced its employees were taking tiered pay reductions (Wood’s pay as CEO, for example, was trimmed by 20% while board members agreed to take a 10% cut in their compensation) and furloughs to keep its doors open.It estimated those steps would reduce its general administrative expenses by between $2 million and $4 million this year and predicted it could save an additional $10 million in production costs by reworking contracts with service providers in both of its operating areas.Gulfport officials said the company will provide information and updates about its process at .Jack MoneyCommenting on NewsOK requires a NewsOK Pro or Oklahoman subscription.or to read and leave comments.

sharesThe number of energy companies either headquartered or operating within Oklahoma filing for bankruptcy continues to climb.Gulfport Energy became the latest and at least the ninth just in the past couple of years to seek the assistance on Saturday, when it filed a case seeking Chapter 11 status in the U.S. Bankruptcy Court for the Southern District of Texas.Gulfport’s filing is based upon a Restructuring Support Agreement (RSA) its petition states it negotiated with lenders. It said the agreement also has been accepted by investors who hold more than two thirds of its senior unsecured...

Another Oklahoma energy company is seeking bankruptcy protection

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