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SCOOP / STACK Operator Files for Bankruptcy

Share Print Bookmark    |    Monday,November 16,2020

Gulfport Energy Corp. has filed for bankruptcy (earlier this year (August 2020), the company warned it was potentially facing bankruptcy).

The company expects to eliminate approximately $1.25 billion in funded debt. As of August 2020, the business had total liabilities of about $2.3 billion.

Gulfport has secured $262.5 million in debtor-in-possession (DIP) financing from existing lenders under its revolving credit facility, including $105 million in new money that will be available upon Court approval. Gulfport has also received a commitment from its existing lenders to provide $580 million in exit financing upon emergence from chapter 11.

Gulfport will also issue $550 million of new senior unsecured notes under the Plan to existing unsecured creditors of certain Gulfport subsidiaries. Certain of Gulfport's noteholders have committed to backstop a minimum new money investment of $50 million in the form of convertible preferred stock.

David M. Wood, President and Chief Executive Officer of Gulfport Energy, stated, "Since Gulfport's leadership team was reconstituted in 2019, we have taken decisive actions to streamline our business, strengthen our balance sheet, focus on cash flow generation, exercise capital discipline, and drive operational efficiencies and cost reductions across the Company. Despite these efforts, our large legacy debt burden in addition to significant legacy firm transportation commitments created a balance sheet and cost structure that was unsustainable in the current market environment. After working diligently to explore all strategic and financial options available, Gulfport's Board of Directors determined that commencing a chapter 11 process is in the best interest of the Company and its stakeholders.

"We expect to exit the chapter 11 process with leverage below two times and rapidly delever thereafter due to a much-improved cost structure driven by reduced legacy firm transport commitments and costs. These improvements will significantly improve our ability to generate cash flow and value for our stakeholders going forward.

"I want to thank our creditors, financing partners and other stakeholders for their support. We also deeply appreciate the hard work of our dedicated employees and their commitment to each other and to our valued business partners. We hope to move through the restructuring process quickly and efficiently and emerge as a stronger company positioned for future success."