On March 14, 2018, EV Energy Partners, L.P. (NASDAQ:EVEP) and its subsidiaries (collectively, “EVEP” or the “Company”) announced that the Company entered into a restructuring support agreement (“RSA”) with certain holders of approximately 70 percent of its 8.0% senior notes due 2019 (the “Senior Notes”) and lenders holding approximately 94 percent of the principal amount outstanding under the Company’s reserve-based lending facility on March 13, 2018. The RSA was also signed by EnerVest, Ltd. (“EnerVest”) and EnerVest Operating, L.L.C. (“EnerVest Operating”) as they will continue to provide services to the Company. In addition, the Company filed its Form 10-K for 2017 with the Securities and Exchange Commission.
The RSA contemplates a comprehensive restructuring of the Company’s capital structure, to be implemented through a proposed pre-packaged plan of reorganization (the “Plan”) that will significantly deleverage the Company’s balance sheet. In order to implement the terms of the RSA, the Company today filed voluntary petitions for restructuring under Chapter 11 of the Bankruptcy Code (“Chapter 11”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). Neither EnerVest nor EnerVest Operating is seeking Chapter 11 bankruptcy relief.
The Company commenced solicitation of the Plan on March 14, 2018. As of the March 30, 2018 voting deadline, each class of claims entitled to vote had voted to accept the Plan. 100 percent of the lenders under the Company’s reserve-based lending facility voted to accept the plan, and noteholders holding more than 99 percent in amount of Senior Notes that voted on the Plan voted to accept the Plan. The Plan, which is subject to confirmation by the Bankruptcy Court, contemplates the equitization of all of the Company’s Senior Notes and the entry into an amended reserve-based lending facility with the Company’s existing lenders. Additionally, the Plan contemplates that suppliers, customers and other holders of general unsecured claims will be paid in full in the ordinary course of business and otherwise be unimpaired. The Company does not plan to reject any of its existing contracts as part of the restructuring.
The Company expects EnerVest Operating to continue as the primary operator for its oil and natural gas properties in the Barnett Shale, San Juan Basin, Appalachian Basin, Michigan, Central Texas, Permian Basin, Monroe Field and Karnes County, TX.
EVEP has filed various customary motions with the Bankruptcy Court in support of its financial restructuring. The Company intends to continue to pay employee wages and provide healthcare and other defined benefits without interruption in the ordinary course of business and to pay suppliers and vendors in full under normal terms provided on or after the Chapter 11 filing date.
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