Upstream: Restructuring: Gastar Exploration: Financial Advisor for Restructuring & Reorganization
Gastar Exploration Inc. (“the Company”) is a publicly traded, pure play Mid-Continent independent energy company based in Houston, Texas engaged in the exploration, development and production of oil, condensate, natural gas and natural gas liquids (NGLs). The Company holds a concentrated acreage position in the STACK play of central Oklahoma.
In late October 2018, Gastar engaged Opportune after it had entered into a restructuring support agreement (“RSA”) with certain holders of Claims and Interests, including the Term Lender, the Second Lien Noteholders and certain holders of Existing Common Interests. To implement the terms of the RSA, the Company filed voluntary petitions for relief under Chapter 11 bankruptcy of the U.S. Bankruptcy Code in the Southern District of Texas.
The Company engaged Opportune’s cross-functional teams and leveraged its existing suite of services. Opportune successfully delivered and executed on a host of activities. The following are just a few highlights during the Company’s general reorganization efforts:
- Assistance with the preparation of financial and other information for distribution to stakeholders and others, including, but not limited to: short-term cash flow projections and budgets, mid/long-term business case, cash receipts and disbursement analysis and analysis of various assets and liability accounts.
- Analysis of proposed transactions
- Assistance with the identification and implementation of short-term cash management procedures
- Assistance to management, counsel and other advisors focused on the coordination of resources related to ongoing reorganization efforts
- Provided certain tax advisory services
- Provided certain fresh start accounting and valuation services
Additionally, Opportune successfully delivered and executed on the following bankruptcy advisory activities:
- Assistance in the preparation of bankruptcy documents, including “first day” motions
- Developed forecasts and information for obtaining bankruptcy court approval of use of cash collateral or “debtor-in-possession” (DIP) financing and related compliance reporting
- Assistance in the preparation of financial related disclosures required by the Bankruptcy Court, including, but not limited to, Schedules of Assets and Liabilities, Statements of Financial Affairs and Monthly Operating Reports
- Assistance with respect to mortgages and lien perfections
- Analysis of creditor claims by type, entity and individual claim, including assistance with development of databases, as necessary, to track such claims
- Provided litigation advisory services with respect to accounting and tax matters
- Expert witness testimony on case-related issues
- Provided ongoing support with respect to managing day-to-day requirements of the bankruptcy process
Opportune added tremendous value by advising the Company on matters concerning bankruptcy-related business operations and with litigation issues related to operating in Chapter 11. Testimony by Opportune’s Managing Partner in court on behalf of the client was decided by the judge. This expert witness role by Opportune on the valuation of the Company was a key swing factor in deciding the case.
In January 2019, the Company ultimately emerged from bankruptcy as a private company (now known as Gastar Exploration LLC). Through this process, the Company had significantly enhanced its financial position by eliminating more than $350 million of debt and preferred equity obligations from its balance sheet.
Since inception, Opportune has been one of the most active financial advisory firms in the energy sector. Our restructuring experience, coupled with our energy-industry expertise, maximizes value for constituents in a distressed situation. We think strategically, and deliver results both operationally and financially through hands-on, actionable implementation to meet the challenges of business turnarounds. We serve equity, secured lenders, unsecured creditors and others throughout the capital structure to enhance value and increase recoveries during times of operational and financial crisis. For more information on our Restructuring services, CLICK HERE.