Midcontinent producer SandRidge Energy Inc. said Monday its reorganization plan has received "overwhelming support" from stakeholders and been confirmed by a Texas bankruptcy court, enabling it to emerge from Chapter 11 in October.
The plan, confirmed by the U.S. Bankruptcy Court for the Southern District of Texas, would eliminate $3.7 billion of the Oklahoma City-based producer's pre-petition funded debt. The Oklahoma City-based independent, which works mostly in Oklahoma's stacked reservoirs and in the Niobrara formation, sought voluntary protection earlier this year (see Shale Daily, May 16; March 30).
"The confirmation of our plan is a milestone event toward the restructuring of our business, attributable to the tireless work of many individuals," CEO James Bennett said. "I would like to acknowledge and thank our dedicated employees for their unwavering focus and high-level performance throughout the reorganization process. It's also important to express my appreciation to our vendors and other stakeholders for their cooperation and support. We look forward to continuing these relationships as we work together to grow our business."
Pro forma capital structure would consist of an undrawn $425 million first lien credit facility that matures in 2020 and $300 million in mandatorily convertible zero coupon debt that would convert into equity. SandRidge also plans to issue new common stock to its pre-petition second lien and general unsecured creditors representing 100% of the pro forma equity interest in the reorganized company.
Once the plan becomes effective, which on Monday was estimated to take 30 days, the company expects to have more than $400 million of liquidity, including cash and debt.
"Key to completing our restructuring in a timely manner was the early recognition by our stakeholders of the long-term value inherent in the company," Chairman Jeff Serota said. He chaired the restructuring committee. "SandRidge worked constructively with its creditors and other constituents to achieve plan approval and is now set to emerge from bankruptcy as a stronger company."