Case Study

Oil & Natural Gas Exploration & Production (“E&P”) Company

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The Fire

  • A once highly successful independent E&P with interests in over 1000 producing wells across several States was suffering financial stress due to severe commodity price shifts.

  • The company could no longer make principal payments and missed an interest payment.

  • Bank syndicate had loaned company $100MM for acquisition.

  • Semi-Annual Reserve Based Lending Re-determination resulted in a $26MM value gap between Reserve Study PV10 and current commodity prices.

The Rescue

  • Reviewed and evaluated borrower’s business plan, underlying financial forecast, assessed borrower’s operations and assessed validity of borrower’s reporting systems while reviewing cash sources.

  • Developed and suggested improvements to enhance borrower’s cash flow and assess the feasibility of any proposed transactions.

  • Conducted an in-depth company evaluation that included multiple base case budgets and cash flow forecasts at various commodity prices to provide debt and restructuring options and alternatives.

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The Result

In less than 3 weeks, presented a detailed and analytic based set of options to the bank syndicate utilizing real world oil & gas operations expertise and financial modeling that served as a basis for forbearance & debt restructuring negotiations.