Davis Polk advised an ad hoc group of prepetition secured lenders and DIP lenders in connection with the chapter 11 restructuring of Fieldwood Energy LLC and its debtor affiliates (collectively, “Fieldwood”).
Fieldwood’s plan of reorganization (the “Plan”) was confirmed by the Bankruptcy Court for the Southern District of Texas on June 25, 2021 and became effective on August 27, 2021. Notably, the Plan incorporated numerous settlements with certain of Fieldwood’s predecessors-in-interest and the federal government with respect to, among other things, the decommissioning obligations associated with assets that were owned by Fieldwood.
The Plan contemplated a set of complex restructuring transactions including a credit bid transaction pursuant to which Fieldwood sold substantially all of its deepwater assets and certain shallow water and other assets to special purpose entities formed at the direction of members of the ad hoc group for aggregate consideration of approximately $1 billion. The ad hoc group and the other prepetition first-lien term loan lenders received 100% of the equity of QuarterNorth Energy Inc., the indirect parent of the special purpose entities, subject to dilution by zero-strike warrants issued in connection with a $185 million second-lien term loan exit facility, equity sold in two rights offerings that raised $40 million of new money in the aggregate, certain backstop commitment premium shares, warrants issued to unsecured creditors and a management incentive plan expected to be established by the new board. Prepetition first-lien term loan lenders also received subscription rights to participate in a $20 million equity rights offering that was fully backstopped by certain members of the ad hoc group and certain other DIP lenders. In addition, certain members of the ad hoc group and certain other DIP lenders provided the $185 million second-lien term loan exit facility.
Headquartered in Houston, Texas, Fieldwood was one of the largest oil and gas exploration and production companies in the Gulf of Mexico, with property including both deepwater and shallow water assets in the Gulf of Mexico.
The Davis Polk restructuring team included partners Damian S. Schaible (Picture) and Natasha Tsiouris, counsel Joshua Sturm and associates Michael Pera and Paavani Garg. The finance team included partner Scott M. Herrig, counsel Christian Fischer and associate Matthew J. Wiener. The mergers & acquisitions team included partner Cheryl Chan and associate Heather Weigel.
Involved fees earner: Cheryl Chan – Davis Polk & Wardwell; Christian Fischer – Davis Polk & Wardwell; Paavani Garg – Davis Polk & Wardwell; Scott Herrig – Davis Polk & Wardwell; Michael Pera – Davis Polk & Wardwell; Damian Schaible – Davis Polk & Wardwell; Joshua Sturm – Davis Polk & Wardwell; Natasha Tsiouris – Davis Polk & Wardwell; Heather Weigel – Davis Polk & Wardwell; Matthew Wiener – Davis Polk & Wardwell;
Law Firms: Davis Polk & Wardwell;