BY Fraser Tennant
With enhanced financial flexibility to support long-term growth, US oil and natural gas exploration firm Exco Resources has successfully completed its financial restructuring and emerged from Chapter 11.
As a result of the Chapter 11 process, the company has reduced its leverage by more than $1.1bn and is moving forward with approximately $325m in committed exit financing from a new credit facility.
Exco originally filed for Chapter 11 in January 2018 due to a sustained downturn in commodity prices and uncertainty in the energy market.
“This is an exciting day for Exco and marks the beginning of the next chapter as an even stronger, more competitive company,” said Hal Hickey, chief executive and president of Exco. “Through the restructuring process, we have significantly improved our capital structure and reduced our debt, and our operations have progressed uninterrupted.”
Headquartered in Dallas, Exco’s principal operations are located in Texas, North Louisiana and the Appalachia region. Following its emergence from Chapter 11, the firm has stated that it will now continue to engage in the exploration, acquisition, development and production of onshore US oil and natural gas properties.
“Our successful emergence from this process is a testament to our former board and talented employees, whose continued focus on our operational initiatives enabled us to execute on our drilling and completion activities while maintaining an exemplary safety record throughout this process,” added Mr Hickey. “I also want to thank our customers, business partners and lenders for their ongoing support. I am honoured to be part of this team and confident our new board will be an asset to Exco as we enter our next stage of business development.”
Now privately-owned, Exco’s shares are no longer available for trading on a public exchange. In accordance with the restructuring plan, Exco’s new five-member board includes representatives from the holders of the firm’s newly issued common stock. The current management team remains in place.
Serving as Exco’s legal adviser during the Chapter 11 process was Kirkland & Ellis LLP. Alvarez & Marsal North America, LLC served as restructuring adviser, with PJT Partners LP serving as financial adviser.
Mr Hickey concluded: “Exco is now better positioned to capitalise on our strong asset base and operational expertise, as we continue enhancing our business and serving our customers, partners and other stakeholders.”