EV Energy Partners emerges from bankruptcy case as Harvest Oil & Gas

By Caroline Salls

Pittsburgh, June 4 – EV Energy Partners, LP’s pre-packaged plan of reorganization took effect on Monday, according to an 8-K filed with the Securities and Exchange Commission.

The plan was confirmed on May 17 by the U.S. Bankruptcy Court for the District of Delaware.

According to a company news release, EV Energy emerged as a new corporation under the name Harvest Oil & Gas Corp.

Through the restructuring, Harvest said it eliminated about $355 million of debt and interest from its balance sheet and significantly enhanced its financial flexibility.

At its emergence, the company entered into an amended and restated credit facility providing for a new reserve-based revolving loan. The initial borrowing base under the credit facility is $325 million, with the first scheduled redetermination of the borrowing base in April 2019.

The outstanding borrowings under the RBL bear interest at a rate equal to “a customary interbank offered rate” plus an applicable margin of 250 basis points to 350 bps, based on use, the 8-K said.

The RBL matures on Feb. 26, 2021.

Harvest has total debt outstanding of $297 million and cash on hand of $21 million, and total liquidity will be $46 million.

“With significantly less debt, we have ample liquidity and expect to generate free cash flow in excess of our planned capital requirements,” president and chief executive officer Michael E. Mercer said in the release.

“We are confident that our diverse asset base will serve as a foundation for our future success.”

As previously reported, EV Energy entered into a restructuring support agreement with holders of its 8% senior notes due 2019 and lenders under its reserve-based lending facility.

The support agreement was also signed by EnerVest, Ltd. and EnerVest Operating, LLC, as they will continue to provide services to EV Energy.

Plan terms

The plan contemplates the equitization of all the company’s senior notes and the entry into an amended reserve-based lending facility.

Suppliers, customers and other holders of general unsecured claims will be paid in full in the ordinary course of business and otherwise be unimpaired.

Existing unit holders will receive 5% of the reorganized equity, subject to dilution, and five-year warrants for up to 8% of the reorganized equity.

Holders of general unsecured claims will be paid in full in cash or receive other agreed treatment.

New board

Effective Monday, the company’s board of directors is comprised of management and direct or appointed representatives of its largest shareholders. The new directors are Mercer, James F. Murchison, Colby Dunn, Steven J. Pully and Patrick Hickey.

Kirkland & Ellis LLP served as legal counsel, and Perella Weinberg Partners LP served as financial adviser to the company in connection with its restructuring efforts.

Outstanding shares

Following completion of the restructuring, the company said it will have 10 million shares of its common stock outstanding and 800,000 warrants with a five-year term to purchase a share of common stock at an exercise price of $37.48.

Harvest said it expects that its shares of common stock will be traded and quoted on the OTC Pink Market under the ticker symbol “HVST.”

EV Energy is a Houston-based master limited partnership that acquires and develops oil and natural gas properties. The company filed for bankruptcy on April 2 under Chapter 11 case number 18-10814.

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