Legacy Reserves to file for bankruptcy as oil and gas price downturn prompts financial restructuring

[Falcon + 222]

Legacy Reserves Inc.'s stock down -57.35% after the oil and gas company said it expects to file for bankruptcy, in an effort to facilitate the implementation of a restructuring agreement with its lenders. Trading volume topped 3 million shares ahead of the open. The agreement will provide for a de-leveraging of its capital structure by over $900 million, including an equity capital infusion of at least $200 million; and payment in full of its other secured creditors, tax and other claimants, trade creditors and employees. The company said it will continue to operate its business without material disruption. "We explored a wide variety of alternatives to address our balance sheet and looming bank maturity during a sustained downturn in oil and gas prices," said Chief Executive Dan Westcott. "After concluding this broad process, we believe that the financial restructuring negotiated with our creditors provides the best path forward for the company." The stock has plummeted 83% year to date..

 

Long time coming.  The only way out is capital restructuring.  Equity holders will bear the burden in the publicly traded producers.  At least its a way forward. The US shale needs restructuring of capital.

[Ward Smith + 6,615]

25 minutes ago, Falcon said:

Legacy Reserves Inc.'s stock down -57.35% after the oil and gas company said it expects to file for bankruptcy, in an effort to facilitate the implementation of a restructuring agreement with its lenders. Trading volume topped 3 million shares ahead of the open. The agreement will provide for a de-leveraging of its capital structure by over $900 million, including an equity capital infusion of at least $200 million; and payment in full of its other secured creditors, tax and other claimants, trade creditors and employees. The company said it will continue to operate its business without material disruption. "We explored a wide variety of alternatives to address our balance sheet and looming bank maturity during a sustained downturn in oil and gas prices," said Chief Executive Dan Westcott. "After concluding this broad process, we believe that the financial restructuring negotiated with our creditors provides the best path forward for the company." The stock has plummeted 83% year to date..

 

Long time coming.  The only way out is capital restructuring.  Equity holders will bear the burden in the publicly traded producers.  At least its a way forward. The US shale needs restructuring of capital.

Or as Buffet said, "When the water goes down, you can see who's been skinny dipping".