Davis Petroleum exits Chapter 11

By Caroline Salls

Pittsburgh, April 20 - Davis Petroleum Corp. emerged from Chapter 11 bankruptcy after its pre-packaged plan of reorganization took effect on March 31, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

Davis filed for Chapter 11 on March 7 and its plan was confirmed on March 10.

Under the plan, the company will be sold for $150 million to Davis Petroleum Acquisition Corp., a company formed by Evercore Partners II, LP.

Davis expects that all creditors will be paid in full. Secured creditors will receive payment on the effective date.

The holders of interests in the company will receive any cash left over.

As part of the plan, a liquidating trust will be created to hold the proceeds from selling the company and make distributions.

The plan estimates that $181.598 million will be available to pay claims, of which $160.12 million will be paid out, leaving $21.5 million to be paid to owners of the equity.

As part of the reorganization, the buyer of the company will inject an additional $40 million of capital. In addition, the restructured company will be debt free and have assets worth $80 million to $90 million.

Secured creditors include bank debt claims of $20 million and $8.98 million owing to Bank of America and subordinated secured claims held by Sankaty of $23.90 million and $20.44 million. All will be paid in full.

Davis is a Houston-based oil and gas exploration and production company operating in the Gulf of Mexico and owner of an oil- and gas-gathering pipeline in Galveston Bay. The case number is 06-20152.

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