MIDLAND, Texas, June 18, 2019 /PRNewswire/ -- Legacy Reserves
Inc. (NASDAQ: LGCY) ("Legacy") announced today that it has,
together with its subsidiaries (collectively, the "Company"),
commenced voluntary cases under chapter 11 of the Bankruptcy Code
in the United States Bankruptcy
Court for the Southern District of Texas (the "Bankruptcy
Court"), pursuant to the terms of the previously announced global
restructuring support agreement (the "Global RSA") between the
Company, its lenders under its revolving credit facility (the "RBL
Lenders"), its lenders under its second lien term loan ("Second
Lien Lenders), and an ad hoc group of senior noteholders (the "Ad
Hoc Group of Senior Noteholders", which, together with the other
creditors party to the Global RSA, hold most of the Company's
outstanding unsecured notes).
The Company intends to operate in the ordinary course of
business during the chapter 11 cases, and has filed a number of
customary "first day" motions to enable the Company's operations to
continue as usual. Specifically, the Company requested
authority, among other things, to pay in full on a normal-course
basis employee wages and honor existing employee benefit programs,
vendors and other operating expenses, joint interest billings for
non-operated properties, and royalties to mineral interest owners
under terms of applicable agreements. As previously announced, the
Company has received a commitment for $350
million in debtor-in-possession ("DIP") financing that,
subject to court approval, will refinance portions of the Company's
existing reserve-based credit facility and, when combined with cash
from operations, will provide ample liquidity to support the
Company's continuing business operations during the chapter 11
cases.
As previously announced, under the Global RSA, creditors
constituencies across all classes of the Company's capital
structure have reached an agreement on the terms of a plan of
reorganization ("Plan"). Under the terms of the Global RSA, the
Company's unsecured notes will be extinguished with substantially
impaired class treatment, and all common stock of Legacy will be
extinguished with no associated recovery. The Company expects to
file the Plan within 45 days.
Legacy's stockholders are cautioned that trading in shares of
Legacy's common stock during the pendency of the chapter 11 cases
will be highly speculative and will pose substantial risks. Legacy
expects that its common stock will be delisted from The Nasdaq
Stock Market LLC for non-compliance with marketplace rules as
result of the chapter 11 cases. Additionally, Legacy expects
there will be no recovery for any equity holder in the chapter 11
cases. Accordingly, Legacy urges extreme caution with respect to
existing and future investments in its common stock.
Court filings and information about the chapter 11 cases can be
found at a website maintained by the Company's claim agent,
Kurtzman Carson Consultants LLC, at www.kccllc.net/legacyreserves,
or by calling (866) 967-0495 (toll-free domestic) or (310) 751-2695
(international).
Perella Weinberg Partners and its affiliate, Tudor Pickering
Holt & Co., is acting as financial advisor for the Company,
Sidley Austin LLP is acting as legal advisor, and Alvarez &
Marsal is acting as restructuring advisor. PJT Partners LP is
acting as financial advisor for the Second Lien Lenders, and Latham
& Watkins LLP is acting as legal advisor. Houlihan Lokey is acting as financial advisor
for the Ad Hoc Group of Senior Noteholders, and Davis Polk & Wardwell LLP is acting as legal
advisor. RPA Advisors, LLC is acting as financial advisor to
Wells Fargo Bank, as administrative agent for the RBL Lenders, and
Orrick Herrington & Sutcliffe
LLP is acting as legal advisor.
About Legacy Reserves Inc.
Legacy Reserves Inc. is an independent energy company engaged in
the development, production and acquisition of oil and natural gas
properties in the United States. Its current operations are
focused on the horizontal development of unconventional plays in
the Permian Basin and the cost-efficient management of
shallow-decline oil and natural gas wells in the Permian Basin,
East Texas, Rocky Mountain and
Mid-Continent regions. Additional information regarding the
Company is available at www.legacyreserves.com.
Forward-Looking Statements
This press release may include "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts,
included in this press release that address activities, events or
developments that the Company expects, believes or anticipates will
or may occur in the future, are forward-looking statements. Words
such as "anticipates," "expects," "intends," "plans," "targets,"
"projects," "believes," "seeks," "schedules," "estimated," and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties, factors and risks, many of which are outside the
control of the Company, which could cause results to differ
materially from those expected by management of the Company. Such
risks and uncertainties include, but are not limited to, the
Company's ability to obtain Bankruptcy Court approval with respect
to motions or other requests made to the Bankruptcy Court; the
ability of the Company to negotiate, develop, confirm and
consummate a plan of reorganization; the ability of the Company to
consummate the rights offering; the effects of the chapter 11 cases
on the Company's liquidity or results of operations or business
prospects; the effects of the bankruptcy filing on the Company's
business and the interests of various constituents; the length of
time that the Company will operate under chapter 11 protection;
risks associated with third-party motions in the chapter 11 cases;
realized oil and natural gas prices; production volumes, lease
operating expenses, general and administrative costs and finding
and development costs; future operating results; and the factors
set forth under the heading "Risk Factors" in Legacy Reserves
Inc.'s filings with the U.S. Securities and Exchange Commission,
including its Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. The reader should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. Unless legally required,
the Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Contact:
Legacy Reserves Inc.
Robert L. Norris
Chief Financial Officer
432-689-5200
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SOURCE Legacy Reserves Inc.