Houston-based Goodrich Petroleum Corp. has emerged from bankruptcy protection with the same assets it had when it filed for Chapter 11 in April, but with reduced debt, a new board of directors and $40 million in new capital.
In a statement Wednesday, the company said it had satisfied the conditions of a reorganization plan filed in U.S. Bankruptcy Court for the Southern District of Texas (see Shale Daily, April 15). The court entered an order confirming the plan on Sept. 28.
"By working constructively with its creditors and other stakeholders, the company emerged from bankruptcy with the same assets and having substantially reduced its total long-term debt and cost structure, which provides the postemergence company with a significantly improved capital structure to maximize the value of its asset portfolio," Goodrich said.
Goodrich said it will receive $40 million in new capital under the reorganization plan, through the issuance of convertible second lien senior secured notes due 2019. Half of the new capital will be used to bring down outstanding borrowings under its previous senior credit facility to $20 million. The remaining $20 million in debt will become Goodrich's new senior secured credit facility. Wells Fargo Bank NA will serve as administrative agent.
The company said the remaining $20 million in new capital will be used to fund initial development of its Haynesville Shale drilling program (see Shale Daily, Oct. 16, 2013; May 10, 2013).
Five new directors -- Ronald F. Coleman, Eugene I. Davis, K. Adam Leight, Timothy D. Leuliette and Thomas M. Souers -- will serve on the board. They will join two existing board members: Walter Goodrich and Robert C. Turnham Jr.
Under the reorganization plan, Goodrich's existing common stock has been cancelled. Its new common stock will be issued to second lien notes claim holders, unsecured notes claim holders, general unsecured claim holders and management. The company said it anticipates that its common stock will be traded on the OTC Markets marketplace within two to three weeks, with plans to list on a major exchange at a later date. Goodrich was dropped from the New York Stock Exchange last January (see Shale Daily, Jan. 14).
According to an 8-K filed last Monday with the U.S. Securities and Exchange Commission, a management incentive plan calls for the issuance of 1 million shares of new common stock, an amount representing 8% of the outstanding fully diluted shares as of the effective date for the reorganization plan.
Before filing for Chapter 11 in April, Goodrich had attempted to restructure its balance sheet through voluntary exchange offers but was unable to get approval from its stockholders and noteholders.