Gulfport Enters Into Restructuring Support Agreement for Pre-Arranged Plan of Reorganization to Reduce Debt by Approximately ...
November 14 2020 - 12:47PM
Gulfport Energy Corporation (NASDAQ: GPOR) (the “Company”
and together with its wholly owned subsidiaries, “Gulfport”) today
announced that it has entered into a Restructuring Support
Agreement (the “RSA”) with over 95% of its revolving credit
facility lenders and certain noteholders holding over two-thirds of
the outstanding aggregate principal amount of its senior unsecured
notes. Attached to the RSA is a “pre-negotiated”
restructuring plan (the “Plan”) that will strengthen Gulfport’s
balance sheet, significantly reduce its funded debt, and lower
ongoing operational costs. Pursuant to the RSA and the Plan,
Gulfport expects to eliminate approximately $1.25 billion in funded
debt and significantly reduce annual cash interest expense going
forward. Gulfport will also issue $550 million of new senior
unsecured notes under the Plan to existing unsecured creditors of
certain Gulfport subsidiaries. Certain of Gulfport’s
noteholders have committed to backstop a minimum new money
investment of $50 million in the form of convertible preferred
stock. The RSA is designed to allow Gulfport to move through the
restructuring process as expeditiously as possible.
To implement the restructuring contemplated by
the RSA and the Plan, Gulfport has filed petitions for voluntary
relief under chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Texas
(“the Court”). Gulfport intends to use the proceedings to
strengthen its balance sheet, restructure certain debt obligations,
significantly reduce its midstream cost structure, and achieve a
more sustainable capital structure. Gulfport intends to continue to
operate in the ordinary course of business during the restructuring
process.
Gulfport also announced that it has secured
$262.5 million in debtor-in-possession (“DIP”) financing from
Gulfport’s existing lenders under its revolving credit facility,
including $105 million in new money that will be available upon
Court approval. The financing is structured to fund Gulfport’s
ordinary course operations during the chapter 11 proceedings,
including employee wages and benefits and payments to suppliers and
vendors. Gulfport has also received a commitment from its existing
lenders to provide $580 million in exit financing upon emergence
from chapter 11.
David M. Wood, President and Chief Executive
Officer of Gulfport Energy, stated, “Since Gulfport’s leadership
team was reconstituted in 2019, we have taken decisive actions to
streamline our business, strengthen our balance sheet, focus on
cash flow generation, exercise capital discipline, and drive
operational efficiencies and cost reductions across the Company.
Despite these efforts, our large legacy debt burden in addition to
significant legacy firm transportation commitments created a
balance sheet and cost structure that was unsustainable in the
current market environment. After working diligently to explore all
strategic and financial options available, Gulfport’s Board of
Directors determined that commencing a chapter 11 process is in the
best interest of the Company and its stakeholders.”
Mr. Wood continued, “We expect to exit the
chapter 11 process with leverage below two times and rapidly
delever thereafter due to a much-improved cost structure driven by
reduced legacy firm transport commitments and costs. These
improvements will significantly improve our ability to generate
cash flow and value for our stakeholders going forward.”
Mr. Wood continued, “I want to thank our
creditors, financing partners and other stakeholders for their
support. We also deeply appreciate the hard work of our dedicated
employees and their commitment to each other and to our valued
business partners. We hope to move through the restructuring
process quickly and efficiently and emerge as a stronger company
positioned for future success.”
To ensure its ability to continue operating in
the ordinary course of business, Gulfport has filed customary
“first day” motions with the Court seeking a variety of relief,
including authority to maintain operations in accordance with
pre-petition practices and to pay certain pre-petition claims for,
among other things, employee wages and benefits, royalties, and
certain vendor and suppliers obligations.
Additional information regarding Gulfport’s
chapter 11 filing will be available at
www.gulfportenergy.com/restructuring. Court filings and information
about the claims process are available at
https://dm.epiq11.com/Gulfport. Questions should be directed to the
Company’s claims agent by email to GulfportInfo@epiqglobal.com or
by phone at (888) 905-0409 (toll free) or +1 (503) 597-7687
(international).
Kirkland & Ellis LLP and Jackson Walker
L.L.P. are serving as legal co-counsel, Perella Weinberg Partners
and its affiliate, Tudor Pickering Holt & Co. are serving as
financial advisors, and Alvarez & Marsal is serving as
restructuring advisor to the Company.
About
GulfportGulfport Energy is an independent
returns-oriented, gas-weighted, exploration and development company
and is one of the largest producers of natural gas in the
contiguous United States. Headquartered in Oklahoma City, Gulfport
holds significant acreage positions in the Utica Shale of Eastern
Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma.
Gulfport has 259 employees.
Forward-Looking Statements This
press release includes “forward-looking statements” for purposes of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are statements other than statements of
historical fact. They include statements regarding: (i) the effect
of the Chapter 11 reorganization and sufficiency of the financing
package; (ii) Gulfport’s ability to continue implementing operating
efficiencies and technical developments; and (iii) Gulfport’s
ability to capitalize on the reorganization and emerge as a
stronger and more competitive enterprise. Although Gulfport
believes the expectations and forecasts reflected in the
forward-looking statements are reasonable, Gulfport can give no
assurance they will prove to have been correct. They can be
affected by inaccurate or changed assumptions or by known or
unknown risks and uncertainties. Important risks, assumptions and
other important factors that could cause future results to differ
materially from those expressed in the forward-looking statements
are described under "Risk Factors" in Item 1A of Gulfport’s annual
report on Form 10-K for the year ended December 31, 2019 and any
updates to those factors set forth in Gulfport's subsequent
quarterly reports on Form 10-Q or current reports on Form 8-K
(available at http://www.ir.gulfportenergy.com/all-sec-filings).
Gulfport undertakes no obligation to release publicly any revisions
to any forward-looking statements, to report events or to report
the occurrence of unanticipated events.
Investor Contact Jessica Antle
– Director, Investor
Relationsjantle@gulfportenergy.com405-252-4550
Media ContactReevemarkHugh
Burns / Paul Caminiti / Nicholas Leasure212-433-4600
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