Samson Resources Corp. lenders garnered sufficient support for a restructuring plan that would give them control of the energy company, which is preparing to file for bankruptcy protection, according to two people with knowledge of the matter. The owners made bet on future of US shale oil and gas and invested $4.15 billion in form of equity in the company.
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The company, owned by private-equity firm KKR & Co, listed assets and liabilities of more than $1 billion in its bankruptcy filing. “We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself”.
In a news release, the company calls the action pre-arranged and say 68-percent of its second lien lenders have already approved of the plan. Concurrent with its petition, the Company also filed with the Court a Prepackaged Chapter 11 Plan of Reorganization and related Disclosure Statement.
Samson’s bankruptcy planning comes as energy companies across the U.S. are trying to shore up their finances with a main product-crude oil-fetching less than half what it did a year ago and natural-gas prices in a prolonged slump.
Documents filed with the Court explain, “Oil and gas companies across the United States and around the world are feeling the pressure from the downward spiral in commodity prices, and the fate of many of these companies is yet to be determined”. Meanwhile, the 44-year-old, formerly family-owned company, which had nearly enough cash on hand to pay off its $695 million in debt before the buyout, was left with $3.6 billion in debt on its books after the deal.
KKR booked losses on Samson some time ago.
The investment by lenders may be further increased, under certain circumstances, by $35 million to improve liquidity, Samson said.
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Samson operations are mainly in in Colorado, Louisiana, North Dakota, Oklahoma, Texas and Wyoming. Overall, the company said it has royalty or working interests in 8,700 oil and gas production sites.
