Black Ridge Oil & Gas Inc. entered a restructuring agreement with subordinated lender Chambers Energy Management LP and other related entities, the company said March 30.
All of the oil and gas assets, including working capital and tangible and intangible assets currently owned by Black Ridge, and their liabilities, will go to Black Ridge Holding Co. LLC (BRHC) along with the liabilities from the senior revolving credit facility and the subordinated credit facility.
BRHC is a new entity controlled and majority-owned by Chambers. Black Ridge will initially own 5% in BRHC, and will continue managing the oil and gas assets in exchange for a management fee and non-voting equity sharing.
The transaction, scheduled to close in May, has an effective date of April 1 and is subject to approval from Cadence Bank NA and completed Securities and Exchange Commission filings.
Minnetonka, Minn.-based Black Ridge Oil & Gas said it will exit restructuring without debt. Ken DeCubellis, CEO, said total debt at year-end 2015 was just over $60 million.
Cadence Bank’s senior revolving credit facility will be transferred to BRHC and a new borrowing base will be determined.
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