TULSA, Okla., Dec. 17, 2015 /PRNewswire/ -- New Gulf Resources
and certain subsidiaries ("NGR" or the "Company") today
announced that they have filed voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Delaware, to facilitate a pre-arranged
restructuring of their balance sheet through a collaborative
reorganization plan. The company has entered into a
Restructuring Support Agreement ("RSA") with an ad hoc committee of
creditors holding more than 72% of its second lien notes and 22% of
its subordinated PIK notes, who have agreed, subject to the terms
thereof, to provide at least $125
million of new capital to increase liquidity
post-reorganization and permanently pay down existing first lien
debt. Specifically, the RSA provides for $75 million in debtor-in-possession ("DIP")
secured credit financing to be funded by, and a $50 million rights offering to be backstopped by,
the ad hoc committee RSA. The company believes this
demonstrates the lenders' support and approval of the Company's
restructuring plan, as well as their commitment to NGR's
success.
The Company is pleased to have the continued support of its
second lien noteholders, who, together with the parties that are
backstopping the equity rights offering, will own substantially all
of the equity in the reorganized NGR. All second lien noteholders
will have the right to participate in a portion of the new money
investment.
"This restructuring is an important step forward, and enables
New Gulf Resources to take full advantage of our attractive assets
in East Texas, most notably, the
Bedias Creek, Johnson Ranch,
Halliday and Kurten areas and to
compete more effectively in the challenging commodity price
environment," said Ralph A.
Hill, Chairman and Chief Executive Officer of New Gulf
Resources. "We are confident that by enhancing liquidity and
right-sizing the Company's debt, the restructuring will allow New
Gulf Resources to navigate the industry's current down-cycle and
bridge to a recovery in commodity prices. We fully expect to
operate business-as-usual throughout this process and to emerge as
a financially stronger company, with long-term benefits for our
employees, vendors and business partners. This is an important
milestone for NGR. We can now combine the strength of our
employees and assets in the prolific East
Texas Basin with the financial strength of our lenders
providing NGR new liquidity and a strong balance sheet. I am
proud the team we brought to NGR has accomplished its goals of
being able to successfully navigate through this poor commodity
environment and clean up the balance sheet while attracting new
talent and proving up the vast potential of our portfolio of
assets."
The Company expects to work diligently with all key parties to
reorganize and exit Chapter 11 in the most efficient manner
possible. The current NGR management team is expected to remain in
place to lead the company through the bankruptcy process and
execute the Company's strategy upon post-reorganization.
New Gulf Resources also filed a series of motions which the
Company anticipates will be granted, enabling the Company to
maintain business-as-usual operations throughout the Chapter 11
process. These first day motions will enable NGR to continue to
produce oil and gas from its existing operations, pay employee
wages, honor existing employee benefit programs and pay royalties
to mineral owners under the current terms of these agreements.
The Company has also filed a motion seeking authority to pay
expenses associated with production operations activities, drilling
and completion activities, costs associated with gathering,
processing, transportation and marketing and expenses related to
joint interest billings for non-operated properties.
Court filings as well as other information related to the New
Gulf restructuring are available through the Company's claims
agent, Prime Clerk, at http://cases.primeclerk.com/NewGulf, via
email to newgulfinfo@primeclerk.com or via phone call to
855-410-7361 (toll-free in North
America) or 212-257-5494 (Outside North America.)
The ad hoc committee of creditors has retained PJT Partners LP
as its financial advisor and Stroock & Stroock & Lavan LLP
as legal counsel.
New Gulf Resources has retained Barclays and Zolfo Cooper LLC as
its financial and restructuring advisors. The Company is
represented by Baker Botts L.L.P.
About New Gulf Resources
New Gulf Resources, LLC (www.newgulfresources.com), based in
Tulsa, Oklahoma, is an independent
energy company engaged in the acquisition, exploration, development
and production of crude oil and natural gas. NGR is highly
experienced in the application of advance technologies such as
horizontal drilling and multi-stage fracture stimulation to
maximize production and reserves. NGR currently produces over
3500 BOE/D and owns over 77,000 net mineral leasehold acres in the
prolific East Texas Basin focusing
on the stacked pay horizontal and vertical targets of the
Cretaceous Eagle Ford, Buda-Rose
and Woodbine formations.
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SOURCE New Gulf Resources