Lonestar Resources pre-packaged Chapter 11 plan confirmed by court

By Sarah Lizee

Olympia, Wash., Nov. 13 – Lonestar Resources US Inc.’s pre-packaged joint Chapter 11 plan of reorganization was confirmed Thursday in the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company entered into a restructuring support agreement on Sept. 14 with its largest stakeholders that will eliminate $390 million in debt and preferred equity interests.

Under the terms of the support agreement, roughly $250 million of the company’s 11¼% senior notes due 2023 will be converted to equity, and accrued interest on those notes will be extinguished.

Lenders under the company’s revolving credit facility who agreed to accept a pre-packaged plan of reorganization will receive their share of warrants to purchase up to 10% of the new equity interests in the company, subject to dilution only by the issuance of new equity interests under a management incentive plan, and will receive revolving loans under an at least $152 million exit revolving credit facility and term loans under the second-out exit term facility.

Holders of preferred equity interests will receive their share of 3% of the new equity interests, subject to dilution by the incentive plan and new warrants, and holders of existing class A common stock will receive their share of 1% of the new equity interests, subject to dilution by the incentive plan and warrants.

Holders of other priority claims, secured tax claims and general unsecured claims will receive payment in full in cash.

Holders of other secured claims will receive payment in full in cash or the collateral securing their claims.

Holders of pre-petition note claims will receive their pro rata share of 96% of the new equity interests, subject to dilution by the management incentive plan equity and any issuances of new equity interests upon exercise of the new warrants.

Intercompany claims will be reinstated, compromised or canceled.

Old Lonestar subsidiary interests will remain effective.

Lonestar Resources is a Fort Worth-based oil and gas company. The company filed Chapter 11 bankruptcy on Sept. 30 under case number 20-34805.

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