Stone Energy Corp. this week completed its reorganization and exited Chapter 11 bankruptcy proceedings, eliminating $1.2 billion of debt and exiting the Appalachian Basin with a $527 million asset sale to EQT Corp.
Stone filed for bankruptcy last December, and the U.S. Bankruptcy Court for the Southern District of Texas approved its pre-packaged restructuring plan on Feb. 15.
Under the restructuring, noteholders received their share of $100 million in cash, $225 million of 7.5% senior second lien notes due 2022 and 95% of the common stock in the reorganized company. Lenders received a proportionate share of commitments under a new $200 million revolving credit facility and a cash payment, while pre-bankruptcy stockholders received 5% of the new company's shares and rights to purchase more.
The sale of 86,000 net acres in the Marcellus and Utica shales of West Virginia and Pennsylvania to EQT was completed on Monday. Stone used a portion of the proceeds to pay stalking horse bidder Tug Hill Inc. a $10.8 million break-up fee. Stone is now left with offshore assets in the Gulf of Mexico (GOM).
The new common shares began trading on the New York Stock Exchange on Wednesday under the ticker symbol "SGY." Stone emerges from bankruptcy with the $225 million in bond debt it issued and an $11.3 million building loan. It does not have any outstanding borrowings under its new credit facility.