Oklahoma City-based exploration and production (E&P) company Tapstone Energy LLC has concluded an out of court financial restructuring plan, trimming about $450 million of principal debt from its balance sheet.

All of the E&P’s existing lenders agreed to exchange outstanding loans into a combination of a new four-year secured term loan of $145 million and common equity, while 99.5% of the senior noteholders agreed to exchange 2022 bonds into a new four-year unsecured term loan of $5 million and common equity in Tapstone.

As part of the deal, Kennedy Lewis Investment Management LLC is investing $50 million in the form of preferred equity. The transaction leaves the independent with more than $60 million in liquidity, a current mark-to-market hedge book of around $55 million, and “the flexibility to pursue growth through acquisitions.”

“The outcome of this process establishes Tapstone as an entity ready to consolidate assets in the Midcontinent,” CEO Steve Dixon said. “We are eager to turn our focus on acquiring producing properties and evaluating merger candidates.”

CFO John J. Kilgallon called the restructuring “a significant accomplishment given the current environment in the energy industry and the broader economy.”

The news comes as many E&Ps are shutting in wells across the Lower 48 as low oil prices have decimated demand. On Monday, West Texas Intermediate prices fell into negative territory for the first time in history.

In an investment presentation last May, Tapstone said it was banking future growth in Oklahoma’s Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties, aka the STACK.

Last October Oklahoma water infrastructure company Bison bought Tapstone’s produced water infrastructure in the Anadarko Basin. Tapstone also was the top bidder for an 80-acre parcel of land in Oklahoma at $226,000 in a lease sale held in March 2019 by the Bureau of Land Management.