OKLAHOMA CITY, May 28, 2019 /PRNewswire/ -- White Star Petroleum, LLC (the "Company" and together with its parent and subsidiaries, "White Star") announced today that it is exploring strategic alternatives, including the sale of its business as a going concern and the restructuring of its balance sheet in a court-supervised process. The Company also announced that it has received $28.5 million in committed "debtor-in-possession" (DIP) financing to bolster liquidity and White Star commenced voluntary Chapter 11 cases with the support of its primary secured creditors. White Star expects to generate positive operating income during its Chapter 11 case and to use the proceeds of the DIP financing to pay the expenses of Chapter 11 and provide supplemental liquidity.
"White Star is continuing to operate its business during the strategic process, and with the DIP financing, has sufficient liquidity to timely pay all employees, vendors and suppliers for services and products provided during Chapter 11," said Elliot Chambers, chief executive officer. "We recognize that the uncertainty of the past months has been difficult for many of our stakeholders but are pleased to have the support of our RBL lenders and an appropriate budget established for operations in Chapter 11."
The Company's DIP financing is being provided by certain of its current syndicate of RBL lenders, with MUFG Union Bank as administrative agent and collateral agent. The DIP financing is subject to court approval. White Star also is seeking court approval of a variety of other motions to ensure the continued ability to operate in the ordinary course of business during the Chapter 11 cases as intended.
White Star has selected Guggenheim Securities, LLC to act as its investment banker in connection with the Chapter 11 cases, including to advise White Star in the exploration of these strategic alternatives. White Star is also being assisted by Alvarez & Marsal North America, LLC as financial advisor, and Sullivan & Cromwell LLP and Morris, Nichols, Arsht & Tunnell LLP as legal advisors.
White Star filed Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware, as previously planned. In the afternoon of May 24, 2019, without notice to the Company, five vendor creditors filed another, involuntary Chapter 11 case against the Company in the United States Bankruptcy Court for the Western District of Oklahoma. The Company is reviewing the facts surrounding the involuntary petition and will seek a determination of the appropriate ultimate venue for its Chapter 11 case promptly in accordance with applicable law and in consultation with its DIP lenders and other stakeholders.
About White Star Petroleum, LLC
White Star Petroleum, LLC is an independent oil and natural gas company focused on the acquisition, development, operation and production of unconventional oil and natural gas properties located in the Mid-Continent region in Oklahoma.
Certain statements in this press release are forward-looking statements, within the meaning of US federal securities laws. Forward-looking statements express views of the Company regarding future plans and expectations. They include statements that include words such as "expect," "intend" and similar words or expressions. Forward-looking statements in this press release include, but are not limited to, statements regarding future operations, the strategic review and anticipated chapter 11 budget. These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties. Actual future results may vary materially from those expressed or implied in these forward-looking statements, and our business, financial condition and results of operations could be materially and adversely affected by numerous factors. As a result, forward-looking statements should be understood to be only predictions and statements of our current beliefs and are not guarantees of performance.
SOURCE White Star Petroleum, LLC