Unit Corporation, Unit Petroleum Company and Unit Drilling Company Enter into RBL Credit Facility
May 26, 2020 at 03:35 pm IST
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On May 22, 2020, Unit Corporation and its direct wholly owned subsidiaries, Unit Petroleum Company (“UPC”), Unit Drilling Company (“UDC”), 8200 Unit Drive, L.L.C. (“8200 Unit”), Unit Drilling Colombia, L.L.C. (“Unit Drilling Colombia”) and Unit Drilling USA Colombia, L.L.C. entered into a Restructuring Support Agreement (“RSA”) with (i) holders (“RBL Lenders”) of 100% of the aggregate principal amount of loans outstanding under the Senior Credit Agreement, dated as of September 13, 2011, by and among the Company, UPC and UDC, as borrowers, the institutions named therein as lenders and BOKF, NA dba Bank of Oklahoma, as administrative agent (“RBL Agent”) and (ii) holders (“Consenting Noteholders”) of more than 70% of the aggregate outstanding principal amount of the Company’s 6.625% senior subordinated notes due 2021 (“Subordinated Notes”). Under the terms of the RSA, the Company RSA Parties, the RBL Lenders, and Consenting Noteholders have agreed to support a restructuring of the Company RSA Parties under the terms of a prenegotiated Chapter 11 plan of reorganization (“Plan”), under which, among other things and subject to the RSA: Each lender under the RBL Credit Facility and the DIP Facility described below will receive its pro rata share of revolving loans, term loans and letter-of-credit participations under the Exit Facility described below, in exchange for that lender’s allowed claims under the RBL Credit Facility or DIP Facility, as applicable; Each holder of the Subordinated Notes will receive its pro rata share of new common shares of the reorganized Company based on equity allocations at each of the Company, UDC and UPC in exchange for the holder’s allowed Subordinated Notes claim; Each holder of an allowed general unsecured claim against the Company or UPC will receive its pro rata share of new common shares of the reorganized Company based on equity allocations at each of the Company and UPC, respectively; Each retained or former employee with a claim on account of vested severance benefits may opt-in to a settlement to receive a cash payment on account of that claim in lieu of an allocation of new common shares of the reorganized Company otherwise provided to holders of general unsecured claims; Each holder of an allowed unsecured claim against UDC, 8200 Unit, Unit Drilling Columbia and Unit Drilling USA will receive payment in full of that claim in the ordinary course of business; and Each holder of the Company’s common stock that does not opt out of the releases under the Plan will receive its pro rata share of seven-year warrants (“Warrants”) to purchase an aggregate of 12.5% of the new common shares of the reorganized Company at an aggregate exercise price equal to the $650 million principal amount of the Subordinated Notes plus interest thereon to the May 15, 2021 maturity date of the Subordinated Notes.
Unit Corporation is a natural gas contract drilling company. The Company is primarily engaged in the development, acquisition, and production of oil and natural gas properties, the land contract drilling of natural gas and oil wells, and the buying, selling, gathering, processing, and treating of natural gas. The Company operates through three segments: Oil and Natural Gas, Contract Drilling, and Mid-Stream. The Oil and Natural Gas segment explores, develops, acquires, and produces oil and natural gas properties for its own account. The Contract Drilling segment contracts to drill onshore oil and natural gas wells for others and for its own account. The Mid-Stream segment buys, sells, gathers, processes, and treats natural gas for third parties and for its own account. The Companyâs producing oil and natural gas properties, unproved properties, and related assets are primarily located in Oklahoma and Texas, in addition to Arkansas, Kansas, and North Dakota to a lesser extent.