Bonanza Creek Energy Inc. said April 7 (NYSE: BCEI) its reorganization plan has received court approval, paving the way for the Denver-based company to exit bankruptcy later this month.
In January, Bonanza Creek filed a prepackaged Chapter 11 bankruptcy in U.S. District Court in Delaware proposing it reduce its debt by $867 million and launch a $200 million equity offering. The plan also will eliminate more than $50 million in annual cash interest, the company said.
Bonanza Creek had been in talks to merge with Bill Barrett Corp. (NYSE: BBG), which said Bonanza had “indicated its interest in a combination transaction,” according to a Securities and Exchange Commission filing.
Bonanza responded in a press release on Jan. 17 that it “received an unsolicited inquiry” from Bill Barrett after disclosing it had entered into a confidentiality agreement with the company.
“In keeping with the agreement it made with Bill Barrett pursuant to the confidentiality agreement, the company does not intend to publicly comment further on this matter at this time,” Bonanza said, adding its lack of comment wasn’t an indication of the company’s position on the offer.
Bonanza owns 70,000 net Denver-Julesburg (D-J) Basin acres, adjacent to or threaded by Bill Barrett’s holdings. The company’s D-J geology includes Niobrara benches A, B, C and the Codell.
In March, Bonanza said it expects to resume drilling and completion activity with a one-rig program following its exit from bankruptcy.
Davis, Polk & Wardwell LLP was legal counsel, Perella Weinberg Partners LP was financial adviser and Alvarez & Marsal LLC was restructuring adviser to Bonanza in connection with its restructuring efforts.
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