Debt | Bankruptcy / Restructure Update | Financial Trouble | Capital Markets | Private Equity Activity

Debt-Loaded Sabine Files for Bankruptcy

Share Print Bookmark    |    Wednesday,July 15,2015

Sabine Oil & Gas Corporation has filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York to facilitate the restructuring of its balance sheet. Sabine continues to engage in constructive discussions with its lenders and debt holders regarding the terms of a consensual financial restructuring plan and is focused on achieving a resolution as expeditiously as possible.  

David Sambrooks, President and Chief Executive Officer of Sabine, said, "The actions we are announcing today represent an important step forward in our efforts to strengthen the Company's capital structure.  Following a comprehensive review of our alternatives, the Board of Directors and management team determined that this process would produce the best outcome for Sabine and its stakeholders.  Undertaking this process provides an orderly path forward to better align the Company's balance sheet with changing market dynamics.

"We remain committed to maintaining operational excellence and executing within our current strategy – and importantly, we fully expect to continue operating in the ordinary course.  We want to thank our employees for their continued dedication during this time as well as our service providers and suppliers for their ongoing support.  We intend to emerge with increased financial flexibility and a sustainable capital structure that will enable us to devote capital to grow our business."

The Company expects that its cash on hand, combined with funds generated from ongoing operations, will provide sufficient liquidity to support the business during the balance sheet restructuring process. 

Like many other exploration and production companies, Sabine's operations have been significantly impacted by the recent and dramatic decline in oil prices, the continued low prices of natural gas, and general uncertainty in the energy market.  These macro-economic factors, coupled with Sabine's substantial debt obligations, resulted in the Company's decision to explore strategic restructuring alternatives to reduce its debt and achieve a sustainable capital structure.  Sabine continues to evaluate and discuss alternatives with its stakeholders and believes that its in-court financial restructuring will position Sabine for profitability and long-term success.

Court filings and other information related to the restructuring proceedings are available at a website administered by the Company's claims agent, Prime Clerk, here.

Lazard is serving as financial advisor to Sabine, and Kirkland & Ellis LLP is serving as legal counsel.