BY Fraser Tennant
In what is a remarkable turnaround given the precarious state of the industry, oil and natural gas company Jones is emerging from Chapter 11 bankruptcy – 33 days after filing.
Jones Energy’s pre-packaged Chapter 11 plan – which fully equitises its funded debt, authorises an exit facility and satisfies all trade, customer, employee, royalty and working claims – was confirmed by the United States Bankruptcy Court for the Southern District of Texas on 6 May. The company believes that it has emerged from bankruptcy stronger, well-capitalised and strategically positioned to maximise the value of its asset portfolio.
A family business which dates back three generations to the 1920s, Jones Energy engages in the exploration and development of oil and natural gas properties in the Anadarko basin of Oklahoma and Texas.
“Our successful record-pace emergence from Chapter 11 reflects extraordinary effort by all parties involved,” said Carl Giesler, director and chief executive of Jones Energy. “We thank our employees for their persistence, patience and professionalism throughout this process. We also thank our mineral interest holders, vendors and suppliers for their steadfastness and cooperation, as well as the various legal and financial advisers for their judgments and guidance.”
Jones Energy has also entered into a new reserve-based credit facility with a group of banks led by TD Securities and an initial borrowing base of $225m. The company has initially elected an aggregate commitment of $150m and will have no outstanding borrowings upon emergence.
“The substantial capital commitment from our bank group highlights the operating momentum achieved by our team and the significant progress made to position the company to enhance the value of our assets,” added Mr Giesler. “Our ongoing optimisation initiatives have yielded strong well results that continue to outpace expectations and have already effected substantial reductions to our cost structure. We recognise the efforts to secure this liquidity, particularly given the current challenging financing environment.”
Mr Giesler concluded: “Jones Energy emerges from Chapter 11 in a strong financial position with the flexibility to optimise the value of its assets for all our stakeholders.”