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Tuesday, June 14, 2016

Halcon Resources Enters Into Restructuring Agreement

From a Halcon Resources press release:
Halcón Resources Corporation (NYSE:HK) ("Halcón" or the "Company") today announced the Company has executed a restructuring support agreement (the "RSA") with select holders of its 13.0% 3rd Lien Notes due 2022 ("3L Notes"), its three tranches of senior unsecured notes comprised of its 9.75% Senior Notes due 2020, its 8.875% Senior Notes due 2021, and its 9.25% Senior Notes due 2022 (together, the "Unsecured Notes"), its 8.0% Convertible Note due 2020 (the "Convertible Note") and its 5.75% Perpetual Convertible Preferred Stock (the "Preferred Equity", and together with the 3L Notes, Unsecured Notes and Convertible Note, the "Affected Stakeholders").

As previously announced, the restructuring plan, if implemented, will result in the elimination of approximately $1.8 billion of net debt and approximately$222 million of Preferred Equity, and will reduce the Company's ongoing annual interest burden by more than $200 million. Under the terms of the RSA, all current stakeholders, including common equity holders, will receive cash and/or common equity in the restructured Company. As of June 9, 2016, holders representing 80% of the aggregate principal amount of 3L Notes outstanding, 57% of the aggregate principal amount of Unsecured Notes outstanding, 100% of the aggregate principal amount of Convertible Note outstanding and holders of 63% of the outstanding shares of Preferred Equity have executed the RSA. The table below summarizes the treatment of the Affected Stakeholders under the plan outlined in the RSA.
Click here to read the entire announcement.

Halcon took a gamble on a chunk of acreage in the northern section of the Utica shale, but the company ceased drilling there after disappointing production results from the wells that were drilled.

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