Magnum Hunter Resources Corporation Receives Court Approval for DIP Financing and All First Day Motions
IRVING, TX--(Marketwired - Dec 17, 2015) - Magnum Hunter Resources Corporation (OTC PINK: MHRC) and certain of its wholly-owned subsidiaries (collectively, the "Company" or "Magnum Hunter") announced today that the United States Bankruptcy Court for the District of Delaware (the "Court") has approved a variety of "first day" motions related to Magnum Hunter's voluntary chapter 11 restructuring. Collectively, the first day orders entered provide the Company with the ability to continue operating in the ordinary course while it continues to pursue a comprehensive financial restructuring.
"The Court's approval is another positive step forward in our efforts to address our capital constraints and reposition Magnum Hunter as a market leader in the new oil and gas operating environment due to record low commodity prices," said Gary C. Evans, Magnum Hunter's Chairman and Chief Executive Officer. The Court approved motions that give the Company the ability to, among other things, pay employee wages and benefits without interruption throughout the restructuring process, continue its current cash management program, continue making royalty payments to mineral owners, and pay pre-bankruptcy claims to certain of the Company's oil and gas vendors.
Importantly, the Court approved the Company's debtor-in-possession financing ("DIP Financing") on an interim basis. As previously announced, the DIP Financing is a key component of the Company's overall restructuring strategy, which is set forth in a restructuring support agreement filed with the Bankruptcy Court (the "RSA"). The DIP Financing generally provides for a $200 million senior and junior secured multi-draw term loan, approximately $40 million of which was made available upon entry of the interim order (the "Initial Draw"). The Initial Draw provides the Company with sufficient liquidity to fund its postpetition operations and continue operating in the ordinary course of business without interruption during these chapter 11 cases.
As previously announced, on December 15, 2015, the Company filed its voluntary chapter 11 cases to implement an in-court financial restructuring that will result in a substantial deleveraging of the Company's balance sheet and that is supported, pursuant to the RSA, by approximately 75% in principal amount of the Company's funded debt claims. Under the timeline set forth in the RSA, the Company expects to emerge from chapter 11 in approximately four months, financially stronger than ever before.
Court filings and other information related to the restructuring proceedings are available free of charge at a website administered by the Company's notice and claims agent, Prime Clerk, at https://cases.primeclerk.com/magnumhunter, or via telephone at 844-276-3026 (toll free) or 917-962-8497 (international). Additional information regarding the restructuring support agreement, including the conditions to the DIP financing and the consummation of the restructuring plan, is contained in a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on December 15, 2015.
PJT Partners LP is serving as financial advisor to Magnum Hunter, Kirkland & Ellis LLP is serving as legal counsel, and Alvarez & Marsal North America, LLC is serving as restructuring advisor. Weil, Gotshal & Manges LLP and Houlihan Lokey are serving as legal counsel and financial advisors, respectively, to an ad hoc group of holders of the Company's first lien debt and second lien debt, in their capacity as prepetition lenders and postpetition DIP lenders. Akin Gump Strauss Hauer & Feld LLP and Centerview Partners are serving as legal counsel and financial advisors, respectively, to an ad hoc group of holders of the Company's first lien debt and senior unsecured notes, in their capacity as prepetition lenders and postpetition DIP lenders.
About Magnum Hunter Resources Corporation
Magnum Hunter Resources Corporation is an independent energy company engaged in the acquisition, production, exploration, and development of onshore oil and natural gas properties in the United States. The Company's current operations are principally located in the Marcellus Shale and Utica Shale regions of the Appalachian Basin, located in in Ohio and West Virginia. The Company also has interests in acreage and production in Kentucky and has primarily non-operating leasehold working interests in the Williston/Bakken Shale region of North Dakota. For more information about Magnum Hunter, please visit www.mhr.energy.
This press release includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although Magnum Hunter believes that the expectations reflected in the forward-looking statements are reasonable, Magnum Hunter can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings made by Magnum Hunter with the Securities and Exchange Commission (SEC). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed by Magnum Hunter with the SEC, including Magnum Hunter's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and its Quarterly Reports on Form 10-Q for the fiscal quarters ended after such fiscal year. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." Forward-looking statements speak only as of the date of the document in which they are contained, and Magnum Hunter does not undertake any duty to update any forward-looking statements except as may be required by law.
(December 17, 2015 - 4:38 PM EST)
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