BY Fraser Tennant
Following a near two-year bankruptcy, struggling energy company Breitburn Energy Partners LP has emerged from Chapter 11 reorganisation and begun operations as Maverick Natural Resources, LLC – a newly-formed company owned and operated by private equity (PE) firm EIG Global Energy Partners.
Despite being a major acquirer, explorer and developer of oil and gas properties in the US, Breitburn was among the dozens of energy companies that filed for bankruptcy in 2016 after a lingering slump in commodity prices that began in late 2014. Now having successfully completed Chapter 11 reorganisation, Breitburn has returned as a new EIG-backed company, Maverick.
As a result of the Chapter 11 restructuring process, Maverick has an approximate debt of $105m, substantially lower than Breitburn’s $2.96bn debt balance prior to initiating the restructuring process. Furthermore, Maverick has approximately $295m of additional borrowing capacity under a new bank credit facility, and its balance sheet provides it with significant financial flexibility and positions the organisation for long-term success.
Specialising in private investments in energy and energy-related infrastructure on a global basis, EIG has been one of the leading providers of institutional capital to the global energy industry since 1982.
“We are pleased to close this chapter and focus on generating value for the Maverick platform,” said Clayton Taylor, managing director of EIG. “Maverick will emerge with low leverage, a simple balance sheet and sufficient liquidity to remain adaptive to the ever-changing market conditions. Following a judicious review of the asset portfolio and cost structure, we believe Maverick is well-positioned to capitalise on cost reduction initiatives, to deploy capital to high growth prospects and to potentially build the platform through strategic acquisitions.”
A portfolio company majority-owned and controlled by funds and accounts managed by EIG, Maverick is focused on the development and production of long-lived oil and gas reserves throughout the US.
“The Chapter 11 reorganisation marks a new beginning for our company and all of our stakeholders and the end of a difficult period managing through the steep and sustained decline in oil and natural gas prices,” said Halbert S. Washburn, Maverick’s chief executive. “Throughout the extended restructuring process, we remained focused on our key goals of managing production and reducing costs to preserve the value of our diverse and long-lived portfolio, substantially reducing debt and dramatically improving our liquidity position, and achieving a consensual plan of reorganisation among our key creditor groups.”