Midstates Petroleum first amended plan of reorganization confirmed

By Caroline Salls

Pittsburgh, Sept. 29 – Midstates Petroleum Co., Inc.’s first amended plan of reorganization was confirmed Wednesday by the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, Midstates entered into a plan support agreement that calls for the paydown of $82 million of first-lien debt and a $170 million credit facility upon emergence, in the form of a reserve-based revolving credit facility, a term loan or a combination of those things; the paydown of up to $60 million of second-lien debt; and the conversion into equity of all of the company’s remaining debt junior to first-lien debt.

Treatment of creditors under the proposed plan will include the following:

• Holders of priority and secured claims, other than secured claims arising under the company’s RBL facility and the second-lien and third-lien notes, will be paid in full, in cash;

• The RBL lenders will receive $82 million in cash and, in return, will provide a $170 million reserve-based exit facility;

• Holders of second-lien notes will receive cash equal to the debtors’ cash on hand as of the plan effective date, less cash payments and reserves to be funded under the plan and $70 million of balance sheet cash, but in no event more than $60 million, as well as 97.5% of the equity in reorganized Midstates;

• Holders of third-lien notes will receive 2.5% of the equity in reorganized Midstates and warrants to acquire an additional 15% of equity. The warrants will strike at a $600 million equity valuation for reorganized Midstates and will expire 42 months after the plan effective date;

• Holders of unsecured notes and general unsecured claims will receive their share of 3.7% of the equity in reorganized Midstates; and

• All existing equity interests will be extinguished, and existing equityholders will receive no distribution.

Midstates Petroleum, a Tulsa, Okla.-based exploration and production company, filed for bankruptcy on April 30. The Chapter 11 case number is 16-32237.

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