Halcon Resources announces emergence from pre-packaged bankruptcy case

By Caroline Salls

Pittsburgh, Oct. 8 – Halcón Resources Corp. announced Tuesday that it emerged from Chapter 11 bankruptcy.

According to a news release, in completing its financial restructuring, the company eliminated more than $750 million in debt and more than $40 million of annual interest expense, significantly enriching its financial condition.

As previously reported, Halcon’s pre-packaged plan of reorganization was confirmed on Sept. 24 by the U.S. Bankruptcy Court for the Southern District of Texas.

Under the plan, holders of the $625 million of outstanding 6¾% notes will receive 91% of the common stock of reorganized Halcon, and existing common shareholders will receive 9% of the new common shares.

Existing common shareholders will also be granted warrants that provide them with the opportunity to purchase up to 30% of the new common shares at prices based on the unsecured noteholders achieving specified recovery levels.

As part of the transaction, some members of an informal creditors group also committed to backstop a $150.15 million new-money equity rights offering of new common shares, which is being offered to unsecured noteholders.

Existing holders of common stock will also be offered the right to participate in a $14.85 million new-money equity rights offering.

Effective at emergence, Halcon said it has $147 million in availability under its new senior secured revolving credit facility, including $3 million in cash, $1 million in outstanding letters of credit and $130 million of borrowing.

The company has 16.2 million shares of common stock outstanding and is governed by a board of directors comprised of chief executive officer Richard Little, chairman of the board William Transier, William Carapucci, David Chang, Scott Germann, Gregory Hinds and Allen Li.

“I am eager to begin working with our new board as we continue to implement a culture of capital discipline in the safe development of our asset base,” Little said in the release. “We remain focused on creating value and enhancing the financial flexibility we have achieved in this process.”

In addition, Halcon announced the appointment of Daniel P. Rohling as executive vice president and chief operating officer, effective Tuesday. Rohling replaces Jon Wright.

Perella Weinberg Partners and Tudor Pickering Holt & Co. acted as financial advisers to Halcon, Weil, Gotshal & Manges LLP acted as legal counsel, and FTI Consulting, Inc. acted as restructuring adviser in connection with the plan.

Halcon is a Houston-based independent energy company. The company filed bankruptcy on Aug. 7 under Chapter 11 case number 19-34446.

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