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Upstream: Energy Advisory Services for Private Capital: Crisis Management

The Undisclosed E&P Company (The Company) is the Holder of strategic assets primarily in the shallow waters of the Gulf of Mexico. The Company’s focus is on acquisitions, production enhancements, development, and low risk exploration in the Gulf of Mexico. Opportune’s professionals were engaged to advise certain Private Equity backers regarding The Company’s current and future financial position. Specifically, Opportune evaluated The Company’s ability to pay down its accounts payable balance while continuing operations.

The Company’s private equity sponsor wanted to ensure The Company would continue to maintain solvency through its upcoming capital projects. Opportune’s restructuring team created a weekly cash flow budget, which projected cash flows for the following nine months. For risk management, Opportune reviewed the updated information weekly and ensured that fund management was apprised of all critical cash flow information, during this period.

Opportune clearly and concisely reported all issues and action steps related to critical cash flow information to fund management. Opportune also created a dynamic cash flow model with flexibility for regular updates based on actual and projected changes in cash flow. Opportune guided The Company by maintaining consistent and frequent communication, creating high level covenant calculations to determine breaches, and tracking anticipated draws on The Company’s revolver to project any additional need for funding.

Opportune’s services resulted in identification of duplicate payments and a reduction to accounts payable of over $3MM. Opportune’s consultants remained on as an ongoing quality assurance and problem-solving resource for The Company through its eventual sale.

Having worked for both companies and their stakeholders across the energy industry, our professionals have engaged in numerous in and out-of-court restructuring situations. We provide crisis management, effecting operational and financial restructurings, and we advise clients through the bankruptcy process. As advisors to companies, we have helped stabilize and revitalize operations, creating long-term value by reducing costs, shedding non-essential operations, realigning capital structures, developing viable plans for working capital and long-term financing, and structuring reorganization plans.

In our work with stakeholders, we have successfully argued for value, supported litigation, provided formal company and industry-specific reports, developed competing reorganization plans, and supported our efforts with testimony and expert work product. For additional information, click here

David Baggett

Managing PartnerOpportune LLP