SIT­U­A­TION

• Chi­ron advised our Client which pro­vid­ed sure­ty bonds to insure plug­ging and aban­don­ment (P&A) oblig­a­tions for Are­na Ener­gy (the ​“Com­pa­ny”)
• Our Client had sig­nif­i­cant, con­tin­gent unse­cured plug­ging and aban­don­ment bond­ing expo­sure to Are­na Ener­gy (“Com­pa­ny”)
  • Client engaged Chi­ron approx­i­mate­ly a week pri­or to the Com­pa­ny seek­ing Chap­ter 11
  • The Com­pa­ny had already nego­ti­at­ed pre-pack­aged Chap­ter 11 terms with exist­ing secured cred­i­tors with senior secured cred­i­tors receiv­ing $0.10-$0.20 per $1.00 of $600 MM of fund­ed debt
  • The Com­pa­ny had offered the Client insuf­fi­cient cred­it enhance­ment terms, and Client was unable to improve position
  • The Client Goal: enhance terms the Com­pa­ny was offering

• Chi­ron Trans­ac­tion­al Advi­so­ry Scope
  • Ana­lyze the Company’s reserves, finan­cial con­di­tion, and well-plug­ging lia­bil­i­ties and out­look upon exit­ing Chap­ter 11
  • Nego­ti­ate with the Com­pa­ny, its Advi­sors and its Pri­vate Equi­ty Backer to pro­tect Client’s con­tin­u­ing con­tin­gent unse­cured cred­it exposure

OUT­COME

• Using deep expe­ri­ence in both oil and finance, Chi­ron nego­ti­at­ed a dou­bling of the col­lat­er­al pro­tec­tion for our Client, enabling the Com­pa­ny to file its pre-pack and con­tin­ue its growth while Client was well protected

“In an off­shore oil and gas restruc­tur­ing, Chi­ron pro­vid­ed the indus­try knowl­edge and the finan­cial insight need­ed to sub­stan­tial­ly improve our col­lat­er­al pro­tec­tions while still giv­ing the com­pa­ny plen­ty of room for growth. They helped to cre­ate a win-win.” — Bob Kirk, RLI