December 17, 2015 - 2:10 PM EST
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New Gulf Resources Files Plan of Reorganization to Implement Financial Restructuring

Pre-Arranged Plan Deleverages Balance Sheet and Provides at Least $125 Million of New Capital Company Operating as Usual During Restructuring

TULSA, Okla., Dec. 17, 2015 /PRNewswire/ -- New Gulf Resources and certain subsidiaries ("NGR" or the "Company") today announced that they have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, to facilitate a pre-arranged restructuring of their balance sheet through a collaborative reorganization plan.  The company has entered into a Restructuring Support Agreement ("RSA") with an ad hoc committee of creditors holding more than 72% of its second lien notes and 22% of its subordinated PIK notes, who have agreed, subject to the terms thereof, to provide at least $125 million of new capital to increase liquidity post-reorganization and permanently pay down existing first lien debt.  Specifically, the RSA provides for $75 million in debtor-in-possession ("DIP") secured credit financing to be funded by, and a $50 million rights offering to be backstopped by, the ad hoc committee RSA.  The company believes this demonstrates the lenders' support and approval of the Company's restructuring plan, as well as their commitment to NGR's success.

The Company is pleased to have the continued support of its second lien noteholders, who, together with the parties that are backstopping the equity rights offering, will own substantially all of the equity in the reorganized NGR. All second lien noteholders will have the right to participate in a portion of the new money investment.

"This restructuring is an important step forward, and enables New Gulf Resources to take full advantage of our attractive assets in East Texas, most notably, the Bedias Creek, Johnson Ranch, Halliday and Kurten areas and to compete more effectively in the challenging commodity price environment," said  Ralph A. Hill, Chairman and Chief Executive Officer of New Gulf Resources. "We are confident that by enhancing liquidity and right-sizing the Company's debt, the restructuring will allow New Gulf Resources to navigate the industry's current down-cycle and bridge to a recovery in commodity prices. We fully expect to operate business-as-usual throughout this process and to emerge as a financially stronger company, with long-term benefits for our employees, vendors and business partners. This is an important milestone for NGR.  We can now combine the strength of our employees and assets in the prolific East Texas Basin with the financial strength of our lenders providing NGR new liquidity and a strong balance sheet.  I am proud the team we brought to NGR has accomplished its goals of being able to successfully navigate through this poor commodity environment and clean up the balance sheet while attracting new talent and proving up the vast potential of our portfolio of assets." 

The Company expects to work diligently with all key parties to reorganize and exit Chapter 11 in the most efficient manner possible. The current NGR management team is expected to remain in place to lead the company through the bankruptcy process and execute the Company's strategy upon post-reorganization. 

New Gulf Resources also filed a series of motions which the Company anticipates will be granted, enabling the Company to maintain business-as-usual operations throughout the Chapter 11 process. These first day motions will enable NGR to continue to produce oil and gas from its existing operations, pay employee wages, honor existing employee benefit programs and pay royalties to mineral owners under the current terms of these agreements.

The Company has also filed a motion seeking authority to pay expenses associated with production operations activities, drilling and completion activities, costs associated with gathering, processing, transportation and marketing and expenses related to joint interest billings for non-operated properties.

Court filings as well as other information related to the New Gulf restructuring are available through the Company's claims agent, Prime Clerk, at, via email to [email protected] or via phone call to 855-410-7361 (toll-free in North America) or 212-257-5494 (Outside North America.)

The ad hoc committee of creditors has retained PJT Partners LP as its financial advisor and Stroock & Stroock & Lavan LLP as legal counsel.

New Gulf Resources has retained Barclays and Zolfo Cooper LLC as its financial and restructuring advisors. The Company is represented by Baker Botts L.L.P.

About New Gulf Resources

New Gulf Resources, LLC (, based in Tulsa, Oklahoma, is an independent energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas.  NGR is highly experienced in the application of advance technologies such as horizontal drilling and multi-stage fracture stimulation to maximize production and reserves.  NGR currently produces over 3500 BOE/D and owns over 77,000 net mineral leasehold acres in the prolific East Texas Basin focusing on the stacked pay horizontal and vertical targets of the Cretaceous Eagle Ford, Buda-Rose and Woodbine formations. 



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SOURCE New Gulf Resources

Source: PR Newswire (December 17, 2015 - 2:10 PM EST)

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