Gulfport Energy Corp. is preparing a chapter 11 filing in Houston as soon as this week and debt restructuring of its $1.9 billion of debt, according to sources. The E&P, its revolver lenders and unsecured bondholders aim to enter bankruptcy with a restructuring support agreement that includes debtor-in-possession financing, the sources said.
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The $325 million 6.625% unsecured notes due 2023 last traded in size on Oct. 9 at 63.75, the $580 million 6% unsecured notes due 2024 last traded in size on Oct. 9 at 63.5, and the $508 million 6.375% unsecured notes due 2025 last traded in size on Oct. 8 at 62.5, according to TRACE.
Gulfport Energy in its
quarterly report for the second quarter in August raised doubt about its ability to continue as a going concern. The company indicated that failure to meet the obligations under its existing indebtedness or failure to comply with any of its covenants, if not waived, would result in an event of default under such indebtedness and the potential acceleration of outstanding indebtedness thereunder and, with respect to the revolving credit facility, the potential foreclosure on the collateral securing such debt, and could cause a cross-default under its other outstanding indebtedness.
On the second-quarter call, CEO David Wood
said that natural gas prices are around 25-year lows and subject to “elevated risk” from an “ever-evolving political environment.”
Gulfport Energy is
working with Kirkland & Ellis as legal advisor and Perella Weinberg and Tudor Pickering as financial advisors. An ad hoc group of unsecured noteholders is
working with Paul Weiss as counsel and Houlihan Lokey as financial advisor, as reported.
Gulfport Energy did not immediately respond to a request for comment.
--Harvard Zhang