Basic Energy’s Chapter 11 plan of liquidation effective as of Aug. 26

By Sarah Lizee

Olympia, Wash., Aug. 29 – Basic Energy Services, Inc.’s Chapter 11 plan of liquidation went into effect on Friday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan was confirmed on Aug. 9, as previously reported.

Last fall, the company closed the sale of Agua Libre Midstream, LLC to purchaser Select Energy Services, Inc. and the sale of its non-California well servicing assets to Ranger Energy Acquisition, LLC, a subsidiary of Ranger Energy Services, Inc.

As consideration for the Agua Libre acquisition, Select Energy issued 902,593 shares of class A common stock and paid $14.5 million in cash to Basic Energy to close the transaction. The purchase price for the non-California well servicing assets was $36.65 million.

The plan provides for the distribution of some of the proceeds of those sales, as well as the distribution of other cash, and the creation of a liquidating trust that will administer and liquidate all remaining property of the debtors.

Under the plan, holders of administrative expense claims and priority tax claims will receive payment in full in cash.

Secured tax claims will be satisfied in full.

ABL claims were fully cash collateralized by cash pledged in favor of Bank of America, NA and held in a restricted account. The ABL claims were paid in full.

Holders of prepetition second-lien note claims will receive cash proceeds from the second lien on the ABL collateral. This class is expected to receive a 56.2% to 68.8% recovery.

Holders of the additional prepetition secured note claims will recover cash proceeds from the pari passu liens on the additional prepetition secured note collateral. This class is expected to receive a 14.8% to 15.4% recovery.

Holders of non-ascribe secured notes claims will receive cash proceeds from the pari passu liens on the prepetition secured notes collateral; the liquidation trust loan non-ascribe 2018 notes funding amount’s allocable portion of the liquidation trust minimum return; and all cash held in the make-whole notes reserve, other than cash used in connection with the liquidation trust loan and to pay administrative expense claims. This class is expected to receive a 16.4% to 17% recovery.

Holders of ascribe secured notes claims will recover cash proceeds from the pari passu liens on the prepetition secured notes collateral, excluding any cash held in the make-whole notes reserve. This class is expected to receive a 14.8% to 15.4% recovery.

Holders of non-tax priority unsecured claims will receive payment in full in cash or other treatment as needed to render the claims unimpaired.

Holders of secured notes deficiency claims will receive their pro rata share of proceeds, subject to standard priority waterfall, of the liquidation trust assets. This class is expected to receive a 0.4% to 3.8% recovery.

Holders of general unsecured claims will receive their pro rata share of any proceeds of the liquidation trust assets on the applicable distribution date. This class is expected to receive a 0.4% to 3.8% recovery.

Interests will be canceled with no distribution to holders.

Based in Fort Worth, Basic Energy Services provides well-site services to oil and gas companies. The company filed bankruptcy on Aug. 17, 2021 under Chapter 11 case number 21-90002.

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