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Bonanza Creek Energy Announces Agreement on Comprehensive Deleveraging and Recapitalization
- BONANZA CREEK ENTERS INTO RESTRUCTURING SUPPORT AGREEMENT WITH BONDHOLDERS HOLDING MORE THAN $400 MILLION IN UNSECURED DEBT
- BONANZA CREEK’S DEBT TO BE REDUCED BY MORE THAN
- CERTAIN BONDHOLDERS COMMIT TO PROVIDE NEW $200 MILLION EQUITY INFUSION
- RESTRUCTURING SUPPORT AGREEMENT PROVIDES FOR OPERATIONS TO CONTINUE AS USUAL, WITHOUT INTERRUPTION, WITH EMPLOYEES, ROYALTY OWNERS, VENDORS AND TRADE CREDITORS TO BE PAID IN FULL IN THE ORDINARY COURSE OF BUSINESS
- SOLICITATION OF VOTES COMMENCING ON PREPACKAGED CHAPTER 11 PLAN
“We are appreciative that our business partners and creditors recognize the value of Bonanza Creek’s employees and assets, and we are pleased that the agreement with our noteholders provides value for all of our stakeholders, including existing equity holders. We look forward to completing the restructuring quickly with minimal disruption to our business, and to repositioning our company as a galvanized operator with an expectation to emerge with no debt and a strengthened liquidity position to execute upon our extensive asset development opportunities.”
Upon effectuation, the consensual financial restructuring would, among other things:
- Eliminate more than
$850 millionof principal, accrued interest and prepayment premiums in respect of the Senior Notes. In exchange, approximately 95.5% of reorganized Bonanza Creek’s equity as of the effective date of the Plan (the “Effective Date”) (subject to dilution by a rights offering for new equity, a management incentive plan, and warrants for existing equity holders) and the opportunity to participate in an equity rights offering that will raise $200 millionof new capital will be made available to holders of general unsecured claims against the Company as provided for in the Plan. This new capital commitment will be backstopped pursuant to an agreement to be entered into by certain Supporting Noteholders, subject to approval by the Bankruptcy Court. Bonanza Creek anticipates emerging from chapter 11 with no funded debt and has sufficient liquidity to operate during the case.
- Restructure Bonanza Creek’s crude oil purchase and sale agreement with NGL on more favorable terms to the Company.
- Pay all customer, employee, royalty and working interest obligations in full in the ordinary course.
- Provide the Company’s existing shareholders, in exchange for the releases by such shareholders of the Released Parties (as defined in the Plan), with consideration in the form of 4.5% of reorganized Bonanza Creek’s equity on the Effective Date (subject to dilution by a rights offering for new equity, a management incentive plan, and warrants for existing equity holders) and 3-year warrants to acquire up to 7.5% of equity in reorganized Bonanza Creek.
In addition, the Company is currently engaged in discussions with KeyBank, National Association, as administrative agent under the Company’s revolving credit facility, with respect to both the treatment of the revolving credit facility in a chapter 11 proceeding and the terms of a renegotiated revolving credit facility after emergence from chapter 11. There can be no assurance an agreement will be reached. All aspects of the Plan remain subject to
Bonanza Creek intends to commence solicitation on the Plan today. Votes on the Plan must be received by
The Company recommends that its creditors, including the holders of Senior Notes, refer to the information in the Company’s Disclosure Statement, which attaches a copy of the Plan. A copy of the Disclosure Statement can be found at https://cases.primeclerk.com/bcei. Information contained in the Disclosure Statement is subject to change, whether as a result of amendments, actions of third parties or otherwise. Additional inquiries should call the information call center at (855) 252-4427 (toll free) or 1+(917) 258-6104 (international).
This press release is for information purposes only and is not intended to be, and should not in any way be construed as, a solicitation of votes of noteholders or other investors regarding the Chapter 11 Plan, and shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of any such state. Any securities to be issued pursuant to the Plan will not be or have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in
More detailed information on the restructuring can be found in the RSA which will be included with a Form 8‐K being filed with the
The Company has been in contact with the
Safe Harbor Statement
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the status of the negotiations and our liquidity. Bonanza Creek has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including (i) changes in demand for our services and any related material impact on our pricing and utilizations rates, (ii) Bonanza Creek’s ability to execute, manage and integrate acquisitions successfully, (iii) changes in our expenses, including labor or fuel costs and financing costs, (iv) continued volatility of oil or natural gas prices, and any related changes in expenditures by our customers, (v) competition within our industry, (vi) Bonanza Creek’s ability to comply with its financial and other covenants and metrics in its debt agreements, as well as any cross-default provisions, (vii) Bonanza Creek’s ability to obtain approval by the
Contacts: Prime Clerk Information Call Center (855) 252-4427
James R. EdwardsDirector, Investor Relations (720) 440-6136