New Chapter 11 Bankruptcy - Armstrong Energy Inc.

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Armstrong Energy Inc.

  • 11/1/17 Recap: What a week or so for coal. #MAGA! While oil and gas post-reorg equities have, despite some recent upward movement, had middling results, coal has fared well. Last week Peabody Energy Inc. ($BTU) reported solid numbers and saw its stock pop above $30/share and Arch Coal Inc. ($ARCH) has also enjoyed a nice run. It's up nearly 4% today. While Contura Energy (f/k/a Alpha Natural Resources Inc.) remains in limbo with a pulled-IPO, Armstrong Energy now joins the aforementioned companies as a bankruptcy filer, with the hopes of effectuating a restructuring support agreement-based debt-for-equity transaction that will effectively turn the keys over to a joint venture comprised of the holders of the company's first lien senior secured notes and Knight Hawk Holdings LLC. More to come once the filing is complete.
  • Jurisdiction: E.D. of Missouri (Judge Surratt-States)
  • Capital Structure: $200mm 11.75% '19 first lien senior secured notes (Wells Fargo Bank NA)
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Jonathan Henes, Ross Kwasteniet, William Guerrieri, Travis Bayer, Timothy Bow) & (local) Armstrong Teasdale LLP (Richard Engel Jr., Erin Edelman, John Willard)
    • Financial Advisor: MAEVA Group LLC (Harry J. Wilson)
    • Restructuring Advisor/CRO: FTI Consulting Inc. (Alan Boyko, Brian Martin, Christopher Marshall)
    • Financial Advisor: Houlihan Lokey Capital Inc.
    • Claims Agent: Donlin Recano & Co. Inc. (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Indenture Trustee: Wells Fargo Bank NA
      • Legal: Loeb & Loeb LLP (Walter Curchack, Vadim Rubinstein) & (local) Spencer Fane LLP (Eric Peterson, Ryan Hardy)
    • Ad Hoc Group of Senior Secured Noteholders (BlueMountain Capital Management LLC, Caspian Capital LP, GoldenTree Asset Management LP, Marathon Asset Management LP, Panning Master Fund LP, Teachers Insurance and Annuity Association of America)
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Brian Hermann, Elizabeth McColm, Diane Meyers, Adam Denhoff, Daniel Youngblut) & (local) Carmody MacDonald PC (Christopher Lawhorn, Thomas Riske)
    • Large Creditors: Thoroughbred Holdings GP LLC, Thoroughbred Resources, L.P., Western Mineral Development, LLC, and Ceralvo Holdings, LLC
      • Legal: Willkie Farr & Gallagher LLP (Matthew Feldman, Debra McElligott) & (local) Husch Blackwell LLP (Marshall Turner)
    • Creditor: Kenergy Corp.
      • Legal: Jones Day (Scott Greenberg, Kyle Patrick Lane)
    • Official Committee of Unsecured Creditors
      • Legal: Morrison & Foerster LLP (Lorenzo Marinuzzi, Jennifer Marines, Daniel Harris, Rahman Connelly) & (local) Affinity Law Group LLC (J. Talbot Sant Jr.)

Updated 11/17/17

New Chapter 11 Filing - Castex Energy Partners LP

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Castex Energy Partners LP

  • 10/17/17 Recap: People have been saying that there is still more oil and gas distress to work its way through the system, particularly offshore-related companies. Well, here, Castex Energy Partners LP, a Houston-based onshore and offshore oil and natural gas exploration and production company located primarily on the coasts of Louisiana and Texas filed for bankruptcy to effectuate a restructuring support agreement with its major parties in interest. The company owns interests in approximately 375 wells (predominantly onshore); it also holds interests in certain seismic interests and specific lands. Like most other oil and gas E&P companies, Castex faced "intense financial pressure" due to the decrease in price of oil and gas and consequent decrease in demand for drilling. The company's EBITDA declined 70% from 2014 to 2016. Yes, you read that right: 70%. Of course, it didn't help that the company made an inopportune decision to invest heavily in offshore development in 2014, outlaying $259mm "in anticipation of future developmental drilling." Timing couldn't have been worse, it seems. Also, the company simply forgot to hedge, apparently; it "was mildly hedged and was exposed to [a massive nat gas] drop." Given all of that, the playbook is pretty un-extraordinary: strapped with a nice chunk of bank debt, the company attempted to make operational cuts to help sustain cash flow while simultaneously running a sales process through Evercore Partners Inc. That process failed. So, now, the company has $4mm of cash on hand and a $15mm DIP credit facility commitment from its prepetition lenders and a restructuring support agreement between it, Capital One Bank, Castex Energy Inc., and the RBL Lenders. The company plans to equitize certain prepetition lenders' debt and emerge from bankruptcy in Q1 of '18. 
  • Jurisdiction: S.D. of Texas (Judge Isgur)
  • Capital Structure: $400mm debt (Capital One Bank (USA) NA)    
  • Company Professionals:
    • Legal: Kelly Hart & Pitre LLP (Louis Phillips, Peter Kopfinger, Amelia Bueche, Patrick Shelby)
    • Restructuring Advisor: Alvarez & Marsal LLC (Ryan Omohundro)
    • Financial Advisor: Evercore Partners Inc.
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Castex Energy Inc.
      • Legal: Norton Rose Fulbright LLP (Kristian Gluck, Gregory Wilkes, Shivani Shah)
    • Prepetition & DIP Admin Agent: Capital One Bank (USA) NA & Consenting Lenders (Amegy Bank, Whitney Bank, IberiaBank, Frost Bank, Cross Ocean, Comerica Bank, Citibank NA, Bank of America Credit Products Inc., Capital One NA)
      • Legal: O'Melveny & Myers LLP (George Davis, Michael Lotito, Daniel Shamah) & (local) Porter Hedges LLP (John Higgins, Amy Geise)
      • Financial Advisor: RPA Advisors LLC
    • Riverstone V Castex 2005 Intermediate Holdings LLC
      • Legal: Vinson & Elkins LLP (Bradley Foxman, Paul Heath)

Updated 10/26/17