Milagro Oil & Gas and five affiliated Debtors filed for Chapter 11 protection in the District of Delaware. The Company is engaged in the acquisition, exploration, exploitation, development, production and sale of oil and natural gas reserves.
Documents filed with the Court explain, “The Debtors commenced the Chapter 11 Cases to effectuate a prearranged bankruptcy plan that was negotiated at arms’-length over a period of several months by and among the Debtors and a number of their chief stakeholders, including: (i) the Prepetition First Lien Agent and Prepetition First Lien Lenders; (ii) the Initial Consenting Noteholders; and (iii) certain of the Debtors’ equity holders. Each of the foregoing, along with the Debtors and White Oak, are parties to that certain Restructuring Support Agreement, dated July 15, 2015 (the ‘Restructuring Support Agreement’).”
Court documents further note, “The Debtors’ oil and gas business requires substantial capital expenditures for the exploration, exploitation and development of crude oil and natural gas reserves and as a result, the Debtors depend heavily on the availability of capital and liquidity to finance their operations. The Debtors’ operating performance has been negatively affected by a combination of declining commodity prices and unsuccessful drilling programs all of which have led to the inability of the Debtors to service their debt obligations and meet their obligations to the Prepetition First Lien Lenders and the Noteholders.”
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