Magnum Hunter Resources Corp. Files For Bankruptcy in Delaware

On December 15, 2015, Magnum Hunter Resources Corporation and certain of its subsidiaries (collectively, “Magnum Hunter” or the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware in Wilmington. According to the declaration of Magnum Hunter’s Chief Executive Officer, Gary C. Evans (the “Evans Declaration”), Magnum Hunter entered into a restructuring support agreement with lenders who hold approximately 75% of its debt. The agreement contemplates a debt-to-equity conversion though a plan has not yet been executed or filed. See Evans Declaration at 12. The term sheet contemplates a blended recovery of some 80 % for trade creditors.The Debtors’ current operations focus on unconventional shale resource plays in the Marcellus Shale and Utica Shale in West Virginia and Ohio. They also own oil and gas properties in Kentucky, Oklahoma, Texas, and the Williston Basin/Bakken Shale in North Dakota and have interests in approximately 431,643 net acres. In addition to traditional E & P operations, the Debtors engage in midstream and oilfield services operations in West Virginia and Ohio. See Evans Declaration at 5.The Debtors liabilities total approximately $1 billion which includes (i) $600 million owed on account of senior unsecured notes issued in 2012, (ii) $336.6 million owed on account of a Senior Lien Credit Agreement with Credit Suisse AG as Administrative Agent, (iii) $70 million under an Amended and Restated Credit Agreement with Bank of Montreal as Administrative Agent, and (iv) $13.2 million owed to trade creditors in the ordinary course of business. See Evans Declaration at 32.The Debtors’ bankruptcy cases are being jointly administered in the bankruptcy case captioned In re Magnum Hunter Resources Corp, et al., Case No. 15-12533. A copy of the Evans Declaration can be accessed here: Download Evans Declaration. The Evans Declaration is designed to be a teaching tool to the Court and creditors. It contains graphs and diagrams to explain the E & P business and the bleak outlook for commodity prices.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/.