Bonanza Creek Energy third amended plan of reorganization confirmed

By Caroline Salls

Pittsburgh, April 7 – Bonanza Creek Energy, Inc.’s third amended plan of reorganization was confirmed by the U.S. Bankruptcy Court for the District of Delaware, according to a company news release.

In addition, the court approved the launch of a rights offering that will result in the infusion of roughly $200 million of new liquidity into the company upon its emergence from bankruptcy.

Bonanza Creek said it expects to emerge from bankruptcy before the end of this month.

“We will emerge as a strong and deleveraged company with a competitive business plan that will position us well vis a vis our industry peers,” president and chief executive officer Richard Carty said in the release.

The company said the pre-packaged plan, which received unanimous support from creditors, incorporates the terms of a previously announced restructuring support agreement with noteholders and one of Bonanza Creek’s crude oil purchase and sale counterparties, NGL Crude Logistics, LLC and its parent, NGL Energy Partners LP.

The plan equitizes more than $867 million of unsecured debt, eliminates over $50 million in annual cash interest and completes a new capital raise of $200 million through the rights offering.

In addition, the plan implements agreements the company reached with its existing secured lenders to continue their support through an amended and restated revolving reserved based lending agreement, a settlement with equityholders to provide them with their share of up to 4.5% of the equity of reorganized Bonanza Creek and three-year warrants for up to 7.5% of the equity and a settlement with members of an informal group of equity holders.

Holders of general unsecured claims against Bonanza Creek will receive 29.4% of the new common shares and 37.8% of subscription rights.

Holders of general unsecured claims against debtors other than Bonanza Creek and Bonanza Creek Energy Operating Co., LLC will receive 48.5% of the new common shares and 62.2% of the subscription rights, and holders of general unsecured claims against Bonanza Creek Operating, will receive 17.6% of the new common shares.

All customer, vendor, and employee obligations associated with the ongoing business will remain unaffected.

Davis, Polk & Wardwell LLP is acting as legal counsel, Perella Weinberg Partners LP is acting as financial adviser and Alvarez & Marsal LLC is acting as restructuring adviser to the company in connection with its restructuring efforts.

The Denver-based oil and natural gas company filed for bankruptcy on Jan. 4. The Chapter 11 case number is 17-10015.

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