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EP Energy's Bankruptcy Plan Finally Approved After Months of Uncertainty

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   |    Friday,August 28,2020

EP Energy Corp. has received approval from the US Bankruptcy Court for the Southern District of Texas for its latest RSA plan.

This comes after EP Energy experienced several snags in its journey through the bankruptcy process. The company initially got approval to exit bankruptcy in early March 2020, however, the approval fell through only weeks later after the collapse of oil prices.

In mid-July 2020, EP submitted an amended plan in which its PE sponsors, Apollo Global Management and Elliott Management Corp., will get back none of their invested funds.

Will Eliminate $4.4B in Debt

The Company expects to emerge from Chapter 11 bankruptcy protection by October 1, 2020.

Upon emergence, EP Energy will reduce its debt by 90% (or approximately $4.4 billion).

It will receive $629 million in senior secured exit financing from the Company's existing revolving loan lenders. Following completion of the process, EP Energy expects to have less than $500 million of debt and a new three-year reserve based loan credit facility.     

President and Chief Executive Officer Russell Parker said, "We are pleased to have received court approval of our Amended Plan, which enables us to emerge from this process with a strong balance sheet and sustainable business model that is positioned for success throughout commodity cycles – including today's challenging operating environment and historically low oil prices. We expect to generate significant free cash flow on a go-forward basis which will provide valuable flexibility to create value for our stakeholders.

"I want to thank our dedicated employees for their commitment and unwavering focus to help us reach this important milestone in EP Energy's financial transformation. I also want to thank our banks, which have provided invaluable support to the Company with the Debtor-In-Possession and Exit Facility financings. On behalf of the EP Energy Board and management team, I also want to express my appreciation for the continued partnership and support of our vendors, lessors and royalty owners. We look forward to completing this process over the coming weeks and beginning a new, stronger chapter."


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