Rosehill Resources to file pre-packaged Chapter 11 case by July 15

By Caroline Salls

Pittsburgh, July 1 – Rosehill Resources Inc. and Rosehill Operating Co., LLC entered into a restructuring support agreement with the lenders under their revolving first-lien credit facility and second-lien notes, Rosehill Resources’ series B preferred stock and equityholder and tax receivable agreement party Tema Oil and Gas Co., according to a news release.

In accordance with the support agreement, Rosehill will make a pre-packaged Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Texas by July 15.

In addition, the company said the restructuring support agreement requires it to enter into a proposed $17.5 million junior convertible debtor-in-possession delayed-draw term loan facility.

Rosehill said it expects to emerge from bankruptcy within 75 days of the filing, which will be made in order to implement the balance sheet restructuring outlined by the support agreement and pre-packaged plan of reorganization.

Following the plan effective date, Rosehill’s equity will be owned solely by the consenting creditors and holders of preferred stock.

Holders of general unsecured claims, including trade creditors and vendors, will pass through the Chapter 11 cases with their claims unimpaired by the bankruptcy and be satisfied in full.

Also under the plan, Rosehill Resources’ class A common stock and other common equity securities will be extinguished. The listing of the company’s class A common stock, class A common stock public units and class A common stock public warrants on the Nasdaq Capital Market will be terminated.

“These are extraordinary times in the industry with the pressure on commodity prices driven by the Covid-19 pandemic,” president and chief executive officer David French said in the release.

“We believe that the restructuring will result in a significantly deleveraged company that will provide us with the liquidity to more effectively navigate the macro oil and gas environment.”

Gibson, Dunn & Crutcher LLP and Haynes and Boone LLP are acting as legal counsel, and Jefferies LLC and Opportune LLP are acting as financial advisers to Rosehill in connection with the plan.

Rosehill Resources is a Houston-based oil and gas company.

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