Vanguard Natural Resources, Inc. announces that it successfully completed its financial restructuring and emerged from Chapter 11 as a new limited liability company under the name of Grizzly Energy, LLC. ("Grizzly" or the "Company").
Image: Onshore wells. Photo: courtesy of Stuart Miles/Freedigitalphotos.net.
Through its financial restructuring, the Company eliminated more than $500 million of secured debt from its balance sheet and significantly enhanced its financial flexibility. At its emergence, the Company is entering into an amended and restated $65 million reserve-based revolving credit facility, a first lien term loan A facility of $65 million and a “last out” first lien term loan B facility of $285 million. The initial borrowing base under the revolving credit facility shall be $65 million, with the first scheduled redetermination of the revolving credit facility borrowing base in April 2020. Grizzly will emerge from Chapter 11 with approximately $375 million of funded debt and $47 million of liquidity comprised of more than $7 million in cash and $40 million of unused revolver capacity.
Mr. R Scott Sloan, President and CEO, commented, “We are very pleased to have completed this reorganization and look forward to working with our stakeholders and Board members in charting a course for the Company with this firmer financial footing. I want to also add a special thanks to all of our employees whose dedication and hard work managing and administering our assets has been exceptional during this process.”
The new Board of Directors collectively echoed Mr. Sloan’s comments stating, “The Board recognizes and appreciates the efforts of management, employees, the advisors and the other stakeholders in collectively completing the restructuring process in under four months. The Board looks forward to working closely with management to maximize value for our stakeholders.”
The following are highlights of the Company’s reserves (including proved undeveloped reserves) as of June 30, 2019:
Total estimated proved reserves of 1,044 Bcfe, of which approximately 64% were natural gas reserves, 20% were oil reserves and 16% were NGLs reserves. 91% of our reserves are considered proved developed and we have an average ten year proved developed decline rate of 9%.
Our assets in the Green River, Piceance, Arkoma, Permian and Big Horn Basins account for approximately 86% of our proved reserves.
Total estimated reserve PV-10 value of $967 million (97% proved developed and 3% undeveloped) using June 30, 2019 SEC commodity pricing.
The following are highlights of the Company’s capital expenditures as of June 30, 2019:
Total capital expenditures were approximately $22 million during the first half of 2019. We currently anticipate a total capital expenditures budget ranging from $43 million to $50 million for the full year of 2019.
These expenditures consist of ongoing drilling and uplift projects in the Woodford play of the Arkoma, the Red Lake area of the Permian, and the Pinedale Field of the Green River basin, as well as maintenance capital across all of the assets.
The Company also announced its new Board of Directors, comprised of the following individuals, whose appointments are effective today:
- Kevin Asarnow, executive director at RPA Advisors, LLC
- Patrick Bartels, managing member at Redan Advisors LLC and formerly at Monarch Alternative Capital, LP
- Stephen McDaniel, an oil and gas consultant formerly at EnerVest, Ltd.
- Dean Swick, a former managing director at Alvarez & Marsal, North America, LLC
- Mike Wichterich, founder and CEO of Three Rivers Operating Co., a private upstream oil and gas company
Evercore Partners Inc. served as financial advisor to the Company, Kirkland & Ellis LLP served as the Company’s legal counsel and Opportune LLP served as the restructuring advisors to the Company.
Source: Company Press Release