MIDLAND, Texas, June 18, 2019 /PRNewswire/ -- Legacy Reserves Inc. (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.
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.
Legacy Reserves Inc.
Robert L. Norris
Chief Financial Officer
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