Atlas Resource Partners LP (ARP) said Monday that it has reached a restructuring deal with nearly all of its lenders and bondholders that agreed to reduce its debt by $900 million in exchange for all the common equity in the new company when it emerges from Chapter 11 bankruptcy proceedings.

The company said it has entered a restructuring support agreement with all of its revolving credit facility lenders and second lien lenders and 80% of its senior noteholders. If completed, ARP said the agreement would reduce the company’s debt by $900 million and lower its interest expense by $80 million per year.

The debt reduction would be achieved through the conversion of ARP’s $668 million in outstanding senior notes into 90% of the restructured company’s common equity. The second lien lenders would also receive 10% of the common equity in the new company, while ARP’s general partner, Atlas Energy Group LLC, would receive a 2% economic interest for providing administrative and operating services.

The restructuring would establish a new senior secured credit facility of $440 million with a redetermination that would be suspended until May 2017 as long as the new company meets certain conditions. ARP said the remaining debt on its books would be cleared with the proceeds from selling its natural gas and oil hedge positions.

ARP said it plans to file the pre-packaged bankruptcy this week. If it emerges from those proceedings, it would be rebranded as Titan Energy LLC. Its management team would largely stay the same.

Under the agreement, ARP’s existing common and preferred unitholders would not be entitled to any of the restructured company’s equity and all existing units would be cancelled. The restructuring plan, however, is still subject to the approval of a bankruptcy court.

In the meantime, ARP said it would continue to operate its properties and pay its employees, suppliers and other stakeholders. The company also said it plans to honor its contracts during the bankruptcy.

According to the Dallas, TX-based law firm, Haynes & Boone LLP, more than 80 North American oil and gas producers have filed for bankruptcy since the beginning of 2015. The commodities downturn has pressured ARP’s finances. Its units were recently suspended from the New York Stock Exchange and it has traded on the over-the-counter market (see Shale Daily, July 21). Before it announced the restructuring deal, the company delayed a payment on its borrowing base and exercised its 30-day grace period to pay interest on its senior notes.

ARP has producing wells and reserves in 17 states, which include assets in the Barnett, Eagle Ford, Marcellus and Utica shales. It has an interest in 14,000 wells across those properties, of which 80% are operated. The company holds 1.5 million net acres.