Penn Virginia Secures Commitment for up to $200 Million in New Financing, Closes on a $50 Million Rights Offering
The U.S. Bankruptcy Court for the Eastern District of Virginia on August 11, 2016, confirmed that Penn Virginia Corporation has satisfied the conditions precedent to the effectiveness of its Plan of Reorganization. The company had filed voluntary Chapter 11 in May of this year.
The Eagle Ford-focused independent oil and gas company emerged from bankruptcy with its total long-term debt reduced by approximately $1.1 billion.
In conjunction with its emergence from bankruptcy, the company closed on its new senior secured revolving credit facility led by Wells Fargo Bank, N.A., with a maximum note amount of $200 million and an initial borrowing base of $128 million.
In addition, Penn Virginia received a $50 million new money contribution through a rights offering subscribed by a large portion of its existing unsecured bondholders, who, together with its existing secured lenders, sponsored the plan. Upon emergence, Penn Virginia will have approximately $75.4 million drawn on its new revolving credit facility and $10.0 million of unrestricted cash.
The emerged company has established a board of directors comprised of Chairman Harry Quarls and board members Darin G. Holderness and Marc McCarthy. Additional members of the board of directors may be appointed at a later date, the company said in a press release.
“Today begins a new chapter in the history of Penn Virginia,” said Quarls in a statement. “We have emerged from bankruptcy with a significantly de-leveraged balance sheet and committed financial support from our senior lenders and other stakeholders. With improved liquidity and a stronger capital structure, we are well-positioned to realize the full value of our excellent asset portfolio.”
Quarls said the company would now “refocus our attention on our operations. We look forward to working closely with all of our key stakeholders as we implement our long-term strategic plan.”
In accordance with the reorganization, Penn Virginia’s existing common stock (OTC PINK: PVAHQ) has been cancelled, and its new common stock will be issued to the bondholders and certain general unsecured claimholders. The Company anticipates that its common stock will be traded over the counter pending assignment of a new ticker symbol and anticipates listing on a major exchange at a later date.
Board of Directors
Quarls currently serves as a managing director at Global Infrastructure Partners, a $33 billion infrastructure fund, as director for Woodbine Holdings LLC, Fairway Resources LLC, and Opal Resources LLC. Quarls is chairman of Woodbine Holdings. Quarls earned an M.B.A. degree from Stanford University and also holds ScM. and B.S. degrees, both in chemical engineering, from M.I.T. and Tulane University, respectively.
Darin G. Holderness, CPA, was the SVP and CFO of Concho Resources until May 2016. He also served as VP and controller of Pure Resources, VP and CFO of Basic Energy Services, VP chief accounting officer of Pioneer Natural Resources, and most recently as SVP and CFO of Eagle Rock Energy Partners. Holderness is a 1986 graduate of Boise State University with a BBA in accounting and is a Certified Public Accountant.
Marc McCarthy is a senior managing director at Wexford Capital LP, an energy focused asset management firm, having joined them in 2008. McCarthy is chairman of Mammoth Energy Services and was chairman ofEnergy Partners Corp. from 2009-2014. Previously, McCarthy worked in the Global Equity Research Department of Bear Stearns & Co., Inc. and was responsible for coverage of the international oil and gas sector. McCarthy is a Chartered Financial Analyst and received a B.A. in economics from Tufts University.
The Eagle Ford
As of November of last year, Penn Virginia reported its position as approximately 100,000 net acres in the oil window of the Eagle Ford shale play in Gonzales and Lavaca Counties, Texas. “Our latest Eagle Ford production was 14,188 BOEPD during the three months ended March 31, 2016, with oil comprising 10,504 BOPD, or 74 percent, and NGLs and natural gas comprising approximately 14 percent and 12 percent,” the company reported on its website.
Penn Virginia recently relocated its corporate headquarters from Radnor, Pennsylvania to Houston, Texas, the company said in a press release.
