Gastar Exploration wins confirmation of pre-packaged Chapter 11 plan

By Caroline Salls

Pittsburgh, Dec. 21 – Gastar Exploration Inc.’s pre-packaged plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the plan will leave obligations owing to trade creditors and other operational obligations unimpaired, eliminate more than $300 million of the company’s funded-debt obligations and preferred equity interests, cancel existing common equity interests and provide $100 million in new, committed financing to fund the restructuring process and ongoing business operations.

Under the proposed pre-packaged plan, holders of administrative claims, priority claims and general unsecured claims will be paid in full in cash.

All drawn amounts under the new money component of the company’s debtor-in-possession financing will roll over into a new exit facility, with all undrawn commitments remaining available to fund Gastar’s post-emergence cash needs.

Holders of all obligations related to the company’s pre-bankruptcy hedging program will receive payment in cash in equal monthly installments under a new secured note through December 2019.

Largest common shareholder Ares Management LLC will receive $200 million in new take-back term loans and 100% of the common equity of reorganized Gastar, subject to any warrants received by the current preferred and common equityholders, as a result of its obligations under the company’s financing and first-lien term loan and all of Gastar’s second-lien convertible note obligations.

Holders of existing preferred interests and common equity will receive a share of $150,000 in cash.

Gastar Exploration is Houston-based oil and natural gas company. The company filed for bankruptcy on Oct. 31 under Chapter 11 case number 18-36057.

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