Gulfport Energy plan confirmation hearing rescheduled for April 16

By Sarah Lizee

Olympia, Wash., March 26 – Gulfport Energy Corp.’s hearing on confirmation of its Chapter 11 plan of reorganization has been moved to April 16 from April 7, according to a notice filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

Under the terms of a restructuring support agreement, the revolving credit facility lenders and an informal group of noteholders have agreed to facilitate a balance sheet restructuring that will reduce debt by about $1.25 billion, reduce the debtors’ high fixed operational costs and provide the debtors with $580 million in exit financing.

Specifically, the revolver lenders, with the Bank of Nova Scotia as administrative agent, will provide a $262.5 million debtor-in-possession facility that will roll up a portion of the existing revolver and provide sufficient liquidity for the debtors to operate while in Chapter 11.

The revolver lenders agreed that the revolver and the DIP facility will convert into a $580 million exit first-lien reserve-based revolving credit facility and a term loan facility in an amount to be determined.

The informal group of noteholders has agreed to backstop a new money rights offering of at least $50 million in exchange for new preferred stock.

The holders of unsecured claims against the debtors, including bondholder claims, rejection damages claims and litigation claims, will receive 100% of the equity of the reorganized debtors, prior to the rights offering and subject to dilution by the management incentive plan. They will also receive $550 million of new unsecured notes, depending on whether the holder’s claim is against the Gulfport parent company or one of its subsidiaries.

Holders of notes claims and general unsecured claims against Gulfport subsidiaries will share in an equity pool consisting of 94% of the equity of the reorganized debtors, prior to the rights offering and subject to dilution by the management incentive plan, and will receive rights offering subscription rights and new unsecured notes.

Holders of notes claims and general unsecured claims against the Gulfport parent company will share in an equity pool consisting of 6% of the equity of the reorganized debtors, prior to the rights offering and subject to dilution by the management incentive plan.

Holders of notes claims will waive recoveries from the Gulfport parent company to the extent holders have, in the aggregate, received 94% of the equity of the reorganized debtors until holders of general unsecured claims receive new common stock with a value sufficient to satisfy their general unsecured claims against the Gulfport parent company in full.

The plan contemplates a global settlement of any and all intercompany claims and causes of action that may exist as of the effective date, and any and all intercompany claims will be canceled in exchange for the distributions contemplated by the plan to holders of claims against and interests in the respective debtor entities.

Holders of intercompany interests will receive no recovery or distribution and will be reinstated only to the extent necessary to maintain the debtors’ pre-petition corporate structure.

The existing equity interests in the Gulfport parent company will be canceled without any distribution.

Gulfport is a natural gas and oil company based in Oklahoma City. The company filed Chapter 11 bankruptcy on Nov. 13 under case number 20-35562.

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