MIDLAND, Texas, July 30, 2019 /PRNewswire/ -- On July 23, 2019, Legacy Reserves Inc., together with its subsidiaries (collectively, the "Company") received approval by the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") for up to $350 million (including up to $100 million in new money loans) in debtor-in-possession financing (the "DIP Financing") that will refinance portions of the Company's existing reserve-based credit facility and, when combined with cash from operations, is expected to provide ample liquidity to support the Company's continuing business operations during its chapter 11 cases. On the same day, the Company obtained Bankruptcy Court approval to hedge its commodity exposure in accordance with the past policies established by the Company's Board of Directors.
By obtaining approval of the DIP Financing, the Company continues to meet the required milestones within its previously announced global restructuring support agreement (the "Global RSA") among the Company, the lenders under its revolving credit facility, the lenders under its second lien term loan ("Second Lien Lenders"), and an ad hoc group of senior noteholders (which, together with the Second Lien Lenders, hold over 60% of the Company's outstanding senior unsecured notes). There are no provisions in the Global RSA that prevent solicitation of additional proposals, and as a result, the Company and its advisors invite any interested parties to make offers or bid on the Company at levels which could be competitive to the terms of the Global RSA. Any interested parties should contact Chad Michael (firstname.lastname@example.org)/ Warren Williamson (email@example.com) at Tudor Pickering Holt & Co. or Kevin Cofsky (firstname.lastname@example.org)/ Sam Tanzer (email@example.com) at Perella Weinberg Partners.
As required pursuant to the terms of the Global RSA, the Company expects to file its Plan of Reorganization (the "Plan") with the Bankruptcy Court by August 2, 2019. It is currently expected that the Plan, if confirmed by the Bankruptcy Court and all conditions to effectiveness are met, will go effective in Q4 2019. Until the Plan is confirmed, the Company may pursue any proposal or set of offers potentially exceeding the transaction value underlying the Global RSA.
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 securities. Court filings and information about the Company's 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). In addition to Perella Weinberg Partners and Tudor Pickering Holt & Co., the Company is represented by Sidley Austin LLP as legal advisor and Alvarez & Marsal as restructuring 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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