Unit disclosure statement approved; plan hearing scheduled for Aug. 6

By Caroline Salls

Pittsburgh, June 19 – Unit Corp. received conditional approval of the disclosure statement for its pre-negotiated plan of reorganization, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan confirmation hearing is scheduled for Aug. 6.

As previously reported, Unit filed bankruptcy to implement a plan that will reduce its funded debt obligations by more than $650 million and “right-size the company’s balance sheet for go-forward operations,” according to a May 22 news release.

The Chapter 11 petitions were filed in accordance with a restructuring support agreement (RSA) between the company, the holders of more than 70% of the company’s 6 5/8% senior subordinated notes due 2021 and all of the lenders under the company’s senior credit agreement.

Under the plan, RBL credit facility and DIP facility lenders will receive a share of revolving loans, term loans and letter-of-credit participations under the exit facility in exchange for their allowed claims.

Holders of subordinated notes and general unsecured claims will receive a share of new common shares in the reorganized company.

Retained or former employees with a vested severance benefits claim may opt in to a settlement to receive a cash payment in lieu of new common shares otherwise provided to general unsecured creditors.

Holders of unsecured claims against the UDC, 8200 Unit, Unit Drilling Columbia and Unit Drilling USA debtors will be paid in full in the ordinary course of business.

Holders of existing common stock that do not opt out of plan releases will receive a share of a seven-year warrants to purchase a total of 12.5% of the new common shares at a total exercise price equal to the $650 million principal amount of the subordinated notes plus interest to the May 15, 2021 maturity date of the subordinated notes.

Unit is a Tulsa, Okla.-based energy company engaged through its subsidiaries in oil and natural gas exploration, production, contract drilling and natural gas gathering and processing. The company filed bankruptcy on May 22 under Chapter 11 case number 20-32740.

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