Commences Chapter 11 Reorganizational
Process to Right-Size Capital Structure
Whiting Petroleum Corporation (NYSE: WLL) and certain
subsidiaries (collectively, “Whiting” or the “Company”) today
announced that they had commenced voluntary Chapter 11 cases under
the United States Bankruptcy Code in the U.S. Bankruptcy Court for
the Southern District of Texas (the “Bankruptcy Court”). The
Company has more than $585 million of cash on its balance sheet and
will continue to operate its business in the normal course without
material disruption to its vendors, partners or employees. Whiting
currently expects to have sufficient liquidity to meet its
financial obligations during the restructuring without the need for
additional financing.
The Company has also reached an agreement in principle with
certain holders (the “Supporting Noteholders”) of its 1.25%
convertible senior notes due 2020, 5.750% senior notes due 2021,
6.250% senior notes due 2023, and 6.625% senior notes due 2026
(collectively, the “Notes”) regarding a term sheet (the “Term
Sheet”) that contemplates a comprehensive restructuring. The
proposed financial restructuring, the terms of which will be set
forth in a forthcoming restructuring support agreement between the
Company and the Supporting Noteholders, would significantly reduce
the Company’s debt and establish a more sustainable capital
structure pursuant to a consensual chapter 11 plan of
reorganization (the “Plan”) that would be supported by the
Supporting Noteholders on the terms of such restructuring support
agreement.
The Plan will provide for, among other things: (1) significant
de-leveraging of the Company’s capital structure by over $2.2
billion through the exchange of all of the Notes for 97% of the new
equity of the reorganized Company to be issued pursuant to the
Plan; (2) payment in full in cash and/or refinancing of the
Company’s revolving credit facility; (3) the payment in full in
cash of all other secured creditors, tax and other priority
claimants, and employees; and (4) the Company’s existing equity
holders receiving 3% of the new equity of the reorganized Company
and warrants (as described in the Term Sheet). Consummation of the
Plan will be subject to confirmation by the Bankruptcy Court in
addition to other conditions to be set forth in the Plan and
related transaction documents.
Bradley J. Holly, the Company’s Chairman, President and CEO,
commented, “In 2019, we took proactive steps to reduce our cost
structure and improve our cash flow profile. We continue to build
on these actions in 2020. The Company has also explored a wide
variety of alternatives to address our balance sheet and looming
note maturities in a highly capital constrained market
environment.
Given the severe downturn in oil and gas prices driven by
uncertainty around the duration of the Saudi / Russia oil price war
and the COVID-19 pandemic, the Company’s Board of Directors came to
the conclusion that the principal terms of the financial
restructuring negotiated with our creditors provides the best path
forward for the Company. We are pleased to have secured a highly
constructive restructuring framework with a critical mass of our
noteholders. Through the terms of the proposed restructuring, we
believe a right-sized balance sheet will enable us to capitalize on
our enhanced cost structure, high-quality asset base and
successfully compete in the current environment.”
Mr. Holly continued, “I want to express my gratitude to the
employees for their continued dedication and hard work, and to our
service providers and business partners for their ongoing support
during this time. Following the restructuring process, we look
forward to having substantially less debt and a significantly
improved outlook for our Company and its stakeholders.”
Moelis & Company is acting as financial advisor for the
Company, Kirkland & Ellis is acting as legal advisor, Alvarez
& Marsal is acting as restructuring advisor and Jeffrey S.
Stein of Stein Advisors LLC is the Company’s Chief Restructuring
Officer.
PJT Partners is acting as financial advisor for the Consenting
Noteholders and Paul, Weiss, Rifkind, Wharton & Garrison LLP is
acting as legal advisor.
For inquiries regarding the restructuring, please call the
hotline established by the Company’s noticing agent, Stretto, at
(800) 330-2531 (toll-free domestic) or go to
cases.stretto.com/whitingpetroleum.
About Whiting Petroleum
Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an
independent oil and gas company that explores for, develops,
acquires and produces crude oil, natural gas and natural gas
liquids primarily in the Rocky Mountain region of the United
States. The Company’s largest projects are in the Bakken and Three
Forks plays in North Dakota and Niobrara play in northeast
Colorado. The Company trades publicly under the symbol WLL on the
New York Stock Exchange. For further information, please visit
http://www.whiting.com.
Forward-Looking Statements
This news release contains statements that we believe to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than historical facts,
including, without limitation, statements regarding our future
financial position, business strategy, projected revenues,
earnings, costs, capital expenditures and debt levels, and plans
and objectives of management for future operations, are
forward-looking statements. When used in this news release, words
such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,”
“believe” or “should” or the negative thereof or variations thereon
or similar terminology are generally intended to identify
forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in, or implied by, such
statements.
These risks and uncertainties include, but are not limited to:
the Company’s ability to obtain bankruptcy court approval with
respect to motions or other requests made to the bankruptcy court;
the ability of the Company to negotiate, develop, confirm and
consummate a plan of reorganization; the effects of the chapter 11
cases on the Company’s liquidity or results of operations or
business prospects; the effects of the chapter 11 cases on the
Company’s business and the interests of various constituents; the
length of time that the Company will operate under chapter 11
protection; risks associated with third-party motions in the
chapter 11 cases; declines in, or extended periods of low oil, NGL
or natural gas prices; our level of success in exploration,
development and production activities; risks related to our level
of indebtedness, our ability to comply with debt covenants,
periodic redeterminations of the borrowing base under our credit
agreement and our ability to generate sufficient cash flows from
operations to service our indebtedness; our ability to generate
sufficient cash flows from operations to meet the internally funded
portion of our capital expenditures budget; our ability to obtain
external capital to finance exploration and development operations;
the impact of negative shifts in investor sentiment towards the oil
and gas industry; impacts resulting from the allocation of
resources among our strategic opportunities; the geographic
concentration of our operations; impacts to financial statements as
a result of impairment write-downs and other cash and noncash
charges to reduce financial leverage and complexity and lower our
capital expenditures; federal and state initiatives relating to the
regulation of hydraulic fracturing and air emissions; revisions to
reserve estimates as a result of changes in commodity prices,
regulation and other factors; inaccuracies of our reserve estimates
or our assumptions underlying them; the timing of our exploration
and development expenditures; risks relating to decreases in our
credit rating; our inability to access oil and gas markets due to
market conditions or operational impediments; market availability
of, and risks associated with, transport of oil and gas; our
ability to successfully complete asset dispositions and the risks
related thereto; our ability to drill producing wells on
undeveloped acreage prior to its lease expiration; shortages of or
delays in obtaining qualified personnel or equipment, including
drilling rigs and completion services; weakened differentials
impacting the price we receive for oil and natural gas; risks
relating to any unforeseen liabilities of ours; the impacts of
hedging on our results of operations; adverse weather conditions
that may negatively impact development or production activities;
uninsured or underinsured losses resulting from our oil and gas
operations; lack of control over non-operated properties; failure
of our properties to yield oil or gas in commercially viable
quantities; the impact and costs of compliance with laws and
regulations governing our oil and gas operations; the potential
impact of changes in laws that could have a negative effect on the
oil and gas industry; impacts of local regulations, climate change
issues, negative public perception of our industry and corporate
governance standards; our ability to replace our oil and natural
gas reserves; negative impacts from litigation and legal
proceedings; unforeseen underperformance of or liabilities
associated with acquired properties or other strategic partnerships
or investments; competition in the oil and gas industry; any loss
of our senior management or technical personnel; cyber security
attacks or failures of our telecommunication and other information
technology infrastructure; and other risks described under the
caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K
for the period ended December 31, 2019. We assume no obligation,
and disclaim any duty, to update the forward-looking statements in
this news release.
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version on businesswire.com: https://www.businesswire.com/news/home/20200401005383/en/
Company Contact: Eric K. Hagen Title: Vice President, Corporate
Affairs Phone: 303.837.1661 Email: Eric.Hagen@whiting.com
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