Energy XXI Ltd Files For Bankruptcy in Houston, Texas

On April 14, 2016, Energy XXI Ltd and certain of its affiliates (collectively, “Energy XXI” or the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.According to the declaration of Energy XXI’s Chief Financial Officer, Bruce W. Busmire, (the “Busmire Declaration”), Energy XXI has entered into a restructuring support agreement with noteholders holding approximately 63% of the Senior Lien Notes. The agreement contemplates a plan which swaps $1.45 billion in secured debt for equity in the reorganized Energy XXI. Energy XXI’s operations are focused on the acquisition, exploration, development, and operation of oil and gas natural properties primarily in the Gulf of Mexico Shelf (the “GoM Shelf”).  Per the Busmire Declaration, the Debtors are an “oil-focused company” owning and operating nine of the largest GoM Shelf oil fields.  The Debtors own more than 740,000 acres of leasehold interests and operate approximately 97% of its proven reserves. See Busmire Declaration at 16.Energy XXI’s liabilities total approximately $2.9 billion in funded debt obligations which includes (i)  $1.45 billion under its 2015 Second Lien Notes with U.S. Bank National Association, as trustee (ii) $99.4 million under a 2011 reserve-based Revolving Credit Facility with Wells Fargo Bank, N.A., as Administrative Agent, (ii) $249.45 million under a 2010 Senior Note Indenture with Wilmington Trust, N.A. as successor trustee (iii) $101.08 million in senior notes with Wilmington Trust, N.A., as successor trustee.  The Debtors also have $388 million in outstanding surety bonds, including lease bonds issued to the Bureau of Ocean Energy Management (“BOEM”) and other third parties. See Busmire Declaration 36-53.The Debtors’ bankruptcy cases are being jointly administered in lead case captioned In re Energy XXI LTD, et al., Case No. 16-31928.A copy of the Busmire Declaration can be accessed here: Download Busmire Declaration.For further information, please contact a Thompson & Knight Bankruptcy and Restructuring Attorney. For more information on the Thompson & Knight’s Bankruptcy and Restructuring Practice, please visit www.tklaw.com/bankruptcy-and-restructuring/.