Sabine Oil & Gas Corporation Files For Bankruptcy in New York

On July 15, 2015 (the “Petition Date”), Sabine Oil & Gas Corporation and certain of its affiliates (collectively, the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York.According to the declaration of Michael Magilton, the Debtors’ Senior Vice President and Chief Financial Officer (such declaration being the “Magilton Declaration”), the Debtors are the surviving business from the business combination of Forest Oil Corporation (“Forest Oil”) and Sabine Oil & Gas LLC (“Old Sabine”) first announced in May 2014 and consummated in December 2014 (the “Combination”).  The Debtors’ principal assets include interests in oil and gas leases in the Cotton Valley Sand and Haynesville Shale in East Texas [278,500 gross (219,200 net) acres], the Eagle Ford Shale in South Texas [88,100 gross (58,700 net) acres], and the Granite Wash in the Texas Panhandle [51,400 gross (36,900 net) acres].  As of December 31, 2014, the Debtors were the designated operator for 88 percent, 99 percent, and 92 percent of its gross producing wells in East Texas, South Texas, and North Texas, respectively.  Magilton Declaration at 13-14.As of May 31, 2015, the Debtors reported approximately $2.5 billion in total assets.  As of the Petition Date, the Debtors had approximately $2.77 billion in principal, funded indebtedness.  Magilton Declaration at 20.Contemporaneously with the filing of the Debtors’ bankruptcy petitions, the Debtors filed an adversary proceeding complaint (the “Complaint”) against Wilmington Trust, N.A. as administrative agent to certain second lien lenders of Old Sabine (in such capacity, “Wilmington Trust”).  The Debtors’ Complaint seeks to avoid certain liens granted by Forest Oil to Wilmington Trust in conjunction with the Combination. Complaint at 3.The Debtors are seeking to have their bankruptcy cases jointly administered under the lead bankruptcy case of In re Sabine Oil & Gas Corporation [Case No. 15-11835].  The Debtors’ bankruptcy cases have been assigned to Bankruptcy Judge Shelley C. Chapman.A copy of the Magilton Declaration can be accessed here: Download Magilton Declaration. A copy of the Debtors’ Complaint against Wilmington Trust can be accessed here:  Download Complaint Against Wilmington Trust. 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/.