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Chief Restructuring Officer for Oil & Gas Company

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Home·Chief Restructuring Officer for Oil & Gas Company

The Situation

Oil & Gas producer in both conventional and non-conventional wells and properties, including gathering midstream owned leases located in Kentucky, West Virginia, Pennsylvania, and Ohio. Subsidiary of a much larger corporation. 700 wells through 37 projects and basin projects, such as the KY pipeline. $500 million in annual sales. $60 million in debt.

  • Senior bank debt and preferred stock.
  • The Gathering Agreement had a default, settlement issues, and was subject to litigation with Dominion Gas.
  • Partnership issues with the joint operator.
  • The Well Abandonment liability is set at over $100+ million.
  • Liquidity issues caused by down pricing.
  • Ownership and management are frustrated with the business.

How We Advised

Our experts were retained as CRO to evaluate the going concern situation and determine the path forward.

  • Negotiated an extended amendment with the senior lender and an extension to restructure the operations.
  • Negotiated a forbearance with Dominion to stay litigation under the Gathering Agreement and allow AOG time to restructure.
  • Negotiated with the joint operator for the release and dissolution of the Actgas partnership, giving AOG full rights in the largest conventional operations.
  • Reduce LOEs and operating costs to break even with forward sales.
  • Sold remaining partnerships and Gas holding through a Section 363 Bankruptcy Auction.
  • Negotiated and agreed to a settlement with the senior lender to reduce and restructure the senior debt and discount the preferred stock ownership.
  • Negotiated full release from joint partner, which increased operational value, reduced over $10 million in disputed liabilities, and allowed for rights to market projects and retain sales value.
  • Negotiated contingent resolution and deferment of Gathering Agreement liability.
  • Fully paid back parent borrowings and outstanding commitments by the senior lender.
  • Sold off idle assets, negotiated resolution with leaseholders on material well abandonment charges.
  • Contract with the buyer of the largest portion of the conventional operated and non-operated assets.
  • Completed all debt restructuring out of court, but filed Chapter 11 to resolve joint venture (JV) litigation and force a sale of the Company’s JV interests
  • Bankruptcy Plan confirmation paid 100% of all unsecured creditors and 100% of restructured secured claims.
  • Bankruptcy Plan made additional preferred and common stock distributions post Bankruptcy confirmation.

Key Contact

Mark J. Welch, CPA, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 412 498 8258 
[email protected] 

Related Practice Areas

> Chief Restructuring Officer (CRO) and Interim Management Services 
Our experienced C-suite interim executives advise and support companies in financial distress, experiencing hypergrowth, or that are challenged by critical vacancies among senior leadership. Whether the leadership void results from operating challenges, a recent officer resignation, the need for added support during busy periods, or during an extended job search for the right permanent hire, our experienced executives provide immediate relief and value. 

 

> Debt Restructuring Services 
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