Enduro Natural Resources LLC

5/15/18

Enduro Natural Resources LLC, an oil and natural gas producer with properties in North Dakota, Wyoming, Texas, Louisiana and New Mexico, has filed for bankruptcy to effectuate a three-package asset sale to three separate stalking horse bidders.  The company notes in an endearingly self-aware way, 

"Like many other upstream energy companies, the Debtors did not anticipate in the early part of this decade that they would eventually succumb to the demands of repaying the capital they borrowed to invest in their exploration and production activities. But the prices of crude oil and natural gas declined dramatically beginning mid-year 2014, as a result of robust nonOrganization of the Petroleum Exporting Countries' ("OPEC") supply growth led by unconventional production in the United States, weakening demand in emerging markets, and OPEC's decision to continue to produce at high levels." 

While the company took a variety of measures to combat the effects of these externalities -- including operational fixes and a prior out-of-court restructuring transaction -- its leverage remained too high in relation to asset value. Indeed, in the aggregate, the combined offers for the three packages of assets equates to $77.5 million which doesn't even clear the first lien debt. 

Finally, the beauty of a huge wave of same-industry chapter 11 filings is that you start seeing the same players over and over again. Among its top creditors are some other oil and gas companies with plenty of experience in bankruptcy court, i.e., Exco Operating Company and Basic Energy Services and, soon, Pioneer Natural Resources. The good times continue to roll in the upstream exploration and production space. 

• Jurisdiction: D. of Delaware
• Capital Structure: $208.7mm first lien RCF (Bank of America NA), $141mm second lien debt (Wilmington Trust NA)   
• Company Professionals:
  • Legal: Latham & Watkins LLP (George Davis, Caroline Reckler, Matthew Warren, Jason Gott, Lindsay Henrikson) & (local) Young Conaway Stargatt & Taylor LLP (Michael Nestor, Kara Hammond Coyle)
  • Financial Advisor: Alvarez & Marsal North America LLC
  • Investment Banker: Evercore LLC
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Sponsor & Major Second Lien Lender: Riverstone Holdings LLC
  • First Lien Agent: Bank of American NA
    • Legal: Davis Polk & Wardwell LLP (Damian S. Schaible, Aryeh Ethan Falk) & (local) Morris, Nichols, Arsht, & Tunnell LLP
    • Financial Advisor: RPA Advisors