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Riviera Finalizes Exit from Midstream Biz with Blue Mountain Sale; Talks Future

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   |    Tuesday,October 13,2020

Riviera Resources, Inc. announced that on October 8, 2020, it closed on the previously announced Blue Mountain sale in an all cash transaction with net proceeds of approximately $111 million.

With the closing of the transaction, the Company has completely exited the midstream business.

Proceeds from the sale were used to repay the total outstanding borrowings of $80 million under Blue Mountain's credit facility. Following repayment in full of all liabilities, including the Blue Mountain credit facility, the remaining sale proceeds were added to cash on Riviera's balance sheet, and will be used, in part, to fund the cash distribution of $1.35 per share.

In addition, the Company closed the previously announced sales of its interest in properties located in North Louisiana in September 2020, and interests in certain properties located in the Anadarko Basin in October 2020, for combined proceeds of approximately $35 million. The Company has also previously announced plans to sell its remaining upstream assets, primarily located in the Mid-Continent region, with plans to close in the fourth quarter of 2020.

Dissolution Plans

On October 12, 2020, the Board approved the dissolution, winding up and liquidation of the Company, and adopted a Plan of Liquidation. Also on October 12, 2020, the required percentage of the Company's shareholders approved, in accordance with the bylaws of the Company, the Plan of Liquidation.

Pursuant to the Plan of Liquidation, the Company will have to pay or provide for the following items:

1. All claims and obligations known to it,
2. Any claim which is the subject of a pending action, suit or proceeding to which it is a party,
3. Claims that have not been known to it but are likely to arise within ten (10) years after the date of dissolution,
4. Any obligations, to the extent owed, to the Company's existing creditors, after providing for (i) through (iii)

After providing for the items above, the Company will distribute any remaining assets, which the Company currently expects to be between $0 and $40 million, to the Company shareholders in accordance with the Company's Certificate of Incorporation, as amended.

The Plan of Liquidation also provides that the Company will make applicable filings and take such other actions as are found to be appropriate to carry out the Plan of Liquidation. The Company intends to file a certificate of dissolution with the State of Delaware, at which time the Company's transfer books and records will be closed and the Company's common stock will cease trading on the OTCQX Market, no later than the close of business on December 31, 2020. After such time, the Company intends to file with the SEC a Certification on Form 15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requesting the suspension of the Company's reporting obligations under Sections 13 and 15(d) of the Exchange Act.

Management Changes

In connection with the plan of dissolution, James G. Frew will resign as Executive Vice President and Chief Financial Officer of the Company effective October 23, 2020. Darren Schluter, who is currently the Company's Executive Vice President of Finance and Administration and Chief Accounting Officer will replace Mr. Frew upon his departure.

In addition, Daniel Furbee, Executive Vice President and Chief Operating Officer of the Company, plans to depart at or prior to the planned closing of the sale of the remaining upstream assets in the fourth quarter of 2020. Mr. Frew's and Mr. Furbee's decisions to resign as Officers of the Company was not the result of any disagreement with the Company on any matter relating to the operations, internal controls, policies or practices of the Company.

Board Changes

Thanasi Skafidas who in his capacity as an employee of York Capital Management, served as a member of the Company's Board, the Audit Committee, and the Compensation Committee of the Board, has resigned from the Board, and Win Rollins, who in his capacity as an employee of Elliott Management Corp., served as a member of the Company's Board, and the Compensation Committee of the Board, has resigned from the Board, each effective October 12, 2020. Mr. Skafidas and Mr. Rollins resignations were not the result of any disagreement with the Company on any matter relating to the operations, internal controls, policies or practices of the Company.