With support from major stakeholders, Houston-based Halcon Resources Corporation voluntarily filed for Chapter 11 bankruptcy protection on Wednesday, according to a company press release.
The beleaguered energy company previously filed for bankruptcy in 2016 but continued to struggle following its initial restructuring efforts.
The new plan will allow Halcon to emerge from bankruptcy within 60 days by disposing more than $750 million in debt, reducing annual interest expense by more than $40 million and giving 91 percent ownership of the company to its creditors. The company will continue to pay vendors, royalty owners and other parties throughout the bankruptcy proceedings.
Halcon received a $35 million debtor-in-possession credit commitment from several stakeholders to fund operations during the bankruptcy process. The company also has a commitment for a new $750 million senior secured revolving line of credit which becomes available when Halcon emerges from bankruptcy. This includes an initial borrowing base of $275 million. After the company exits the Chapter 11 proceedings, Halcon expects to have liquidity in excess of $150 million, according to a company press release.
Halcon’s former CEO, legendary wildcatter Floyd Wilson, abruptly resigned in February after serving seven years at the helm. Wilson’s extravagant spending habits came under the fire of Fir Tree Capital hedge fund management. Since his departure, Wilson founded Houston-based Falconer Oil & Gas, which is seeking growth opportunities in the West Texas Permian Basin and South Texas Eagle Ford shale.
Halcon operates field properties in Texas, Louisiana and Oklahoma.