On December 17, 2015, New Gulf Resources, LLC and 3 affiliated debtors (collectively, the “Debtors”) each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.  The cases are jointly administered under Case No. 15-12566 and are pending before the Honorable Brendan Linehan Shannon. The first day hearing was held on December 18, 2015.  The “second day” hearing is scheduled for January 19, 2016 at 12:00 p.m.

A majority of the information available about the Debtors can be found in one of three places: the Declaration of Danni Morris in Support of the Debtors’ First Day Motions [D.I. 13] (the “Declaration”); the website established by the Debtors’ claims agent, Prime Clerk, https://cases.primeclerk.com/newgulf; and the website created by the Debtors to inform investors about the bankruptcy, http://newgulfresources.com/about/restructure_information.asp.  The Debtors constitute yet another in a growing stream of energy providers to have declared bankruptcy in recent months.  In this case, they were engaged in the acquisition, development, exploration and production of oil and natural gas properties, focused primarily in the East Texas Basin.  As of November 2015, the Debtors’ properties were producing approximately 3500 net barrels of oil equivalents per day.  Declaration at *3.  The intent of the Debtors in filing this bankruptcy is to ‘right-size’ their balance sheets so that they can move forward profitably.

The Debtors represent on their website (linked above and last accessed on 1/4/2016) that as of the petition date, they had entered into a Restructuring Support Agreement (“RSA”) with an ad hoc committee of creditors holding more than 72% of its second lien notes and 22% of its subordinated PIK notes, who have agreed, subject to the terms thereof, to provide at least $125 million of new capital to increase liquidity post-reorganization and permanently pay down existing first lien debt. Specifically, the RSA provides for $75 million in debtor-in-possession (“DIP”) secured credit financing to be funded by, and a $50 million rights offering to be backstopped by, the ad hoc committee RSA.  The Debtors are represented by Baker Botts L.L.P. and Young Conaway Stargatt & Taylor, LLP in these bankruptcy proceedings.
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