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Jones Energy makes it official—-Chapter 11 bankruptcy

Texas-based Jones Energy, Inc., the firm with expansive drilling operations throughout the western reaches of Oklahoma and the Texas Panhandle formally filed for Chapter 11 bankruptcy reorganization this week.

The firm listed liabilities ranging from $1 billion to $10 billion with assets totaling $1 million to $10 million. Documents also indicated the company has anywhere from 200 to 999 creditors.

It was last week when the company announced its bankruptcy intentions as well as a comprehensive Restructuring Support Agreement with its First Lien and Unsecured Noteholders.

The filing was made in the U.S. Bankruptcy Court for the Southern District of Texas in Houston. Bankruptcy Judge David R. Jones was assigned the case and a confirmation hearing was set for May 6, 2019. (Case 19-32112)

On April 15, 2019, the Court entered orders approving all of the Company’s requested “first day” relief, which will allow the Company to maintain its operations as usual throughout the restructuring process, according to an announcement by Jones Energy.

Included in these “first day” orders are authorizations on a final basis for the Company to continue to pay on a normal-course basis employee wages and honor existing employee benefit programs, pay taxes, and remit royalties to mineral owners under the terms of the applicable agreements.

The Court also entered final orders giving the Company authority to pay on a normal-course basis expenses associated with its operations and drilling and completion activities, as well as costs associated with gathering, processing, transportation, marketing, and those related to joint interest billing for non-operated properties.

Obtaining this relief on a final basis sends a strong message that Jones Energy will continue to operate in the normal course and its business operations will not be disrupted by the restructuring process.

As previously announced, on April 3, 2019, Jones Energy commenced the solicitation of votes to accept or reject the Plan.  As of the filing, the Company has received votes from holders of approximately 92% in principal of the First Lien Notes and approximately 83% in principal of the Unsecured Notes, all of whom voted to accept the Plan.  As a result, Jones Energy has sufficient acceptances to carry two of the three voting classes under the Plan and, therefore, expects to meet the requirements for confirmation of the Plan.

Mr. Carl Giesler, Director and Chief Executive Officer, commented, “The financial restructuring that we announced today is necessary to attain a capital structure suitable to optimize the value of the Company’s assets and execute on its future business strategy.  We are now focused on expediting an efficient in-court restructuring, maintaining operational continuity and momentum, and upholding our obligations – including that of timely payment – to our employees and vital vendors and stakeholders.”

With overwhelming stakeholder support for the Plan, the Court approved an expedited chapter 11 timeline. The Court has set a deadline to vote to accept the Plan on May 1, 2019, by 4 p.m. CT.  The Company expects to emerge from bankruptcy no later than fourteen days following confirmation of the Plan.

 

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