Legacy Reserves granted interim court OK to access DIP financing

By Caroline Salls

Pittsburgh, June 20 – Legacy Reserves Inc. obtained court approval to access $350 million in debtor-in-possession financing on an interim basis, according to an order filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

Legacy said it has secured commitments for DIP financing from some of its existing RBL lenders, including Wells Fargo Bank, NA, that, subject to court approval, will refinance portions of its existing reserve-based credit facility and provide an additional $100 million of revolving, new-money financing to support day-to-day operations and finance the restructuring process.

The company said borrowings under the new-money facility will bear interest at the alternate Base rate plus 425 basis points or Libor plus 525 bps, and the refinancing facility will bear interest at the alternate Base rate plus 350 bps.

The DIP facility will mature on the earliest of eight months after the bankruptcy filing date, 35 days after entry of the interim order if a final order has not been entered, the company’s exit from Chapter 11, the sale of substantially all of the company’s equity or assets and termination of the facility because of an event of default.

Legacy Reserves is a Midland, Tex.-based company focused on the acquisition and development of oil and natural gas properties. The company filed bankruptcy on June 18 under Chapter 11 case number 19-33395.

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