After several months of negotiations with nearly three-quarters of its creditors, Triangle USA Petroleum Corp. (TUSA) and two of its affiliates voluntarily filed for Chapter 11 bankruptcy protection in Delaware on Wednesday.
TUSA, the wholly-owned exploration and production (E&P) segment of Triangle Petroleum Corp., which is focused on the Bakken Shale and Three Forks formation, said it has entered into a plan support agreement (PSA) with approximately 73% of its 6.75% senior unsecured noteholders. The notes, which are due in 2022, total $381 million.
Under the PSA, the notes will be converted into equity and a new money rights offering for $100 million, which will be supported by a commitment from certain participating noteholders. The PSA also calls for paying off TUSA's existing reserve-backed credit facility with funds from a new revolving credit facility, existing cash at emergence and proceeds from the new money rights offering.
TUSA said it plans to use the Chapter 11 process to continue talks with other stakeholders -- including other noteholders -- the bank group in its senior reserve-backed credit facility and parties with which it currently has midstream agreements, including affiliates of Caliber Midstream Partners LP (see Shale Daily, Oct. 2, 2012).
TUSA added that it expects to continue its operations without interruption, and added that it has more than enough liquidity to fund its operations during the restructuring process. The E&P segment said it currently has about $88 million in cash and cash equivalents. TUSA also said it also asked the U.S. Bankruptcy Court for the District of Delaware for permission to use cash as collateral, as approved under an agreement with its bank group. Consequently, TUSA is not expected to seek debtor-in-possession financing.
"TUSA intends to complete its balance sheet restructuring as quickly as possible and emerge as a stronger enterprise with a capital structure better suited to a lower commodity price environment and the potential to create and deliver long-term value," the company said Wednesday.
According to court documents [No. 16-11566-MFW], the TUSA affiliates that also filed for Chapter 11 are Foxtrot Resources LLC and Leaf Minerals LLC. Meanwhile, another subsidiary of Triangle Petroleum, Ranger Fabrication LLC, and two of its affiliates -- Ranger Fabrication Management Holdings LLC and Ranger Fabrication Management LLC -- also filed separately for Chapter 11. Ranger ceased operating earlier this year, TUSA said.
Neither the parent company, Triangle Petroleum, nor its affiliated company, RockPile Energy Services LLC (see Shale Daily, Sept. 10, 2015), is included in the TUSA filing. Judge Mary Walrath is presiding over the case.
TUSA said John Castellano of AP Services LLC has been appointed chief restructuring officer.