Struggling oil-and-gas producer Samson Resources Corp. is
weighing whether to slash its $4.2 billion debt load through a
bankruptcy restructuring or take a rescue loan from a group of
junior creditors, according to people familiar with the matter.
Samson, based in Tulsa, Okla., said in March that a chapter 11
filing might offer the best route to restructure its heavy debt
load, a legacy of a its 2011 leveraged buyout led by private-equity
firm KKR & Co.
The company is now in talks with a pair of creditor groups on
different debt-restructuring options, including one that would at
least temporarily keep it out of bankruptcy court.
The New York Post earlier reported on the restructuring options
Samson is exploring.
The rescue financing talks reflect investor appetite for
potentially high-reward energy investments, fueled in part by the
chance that volatile commodity prices will lead to a rebound in
energy firms' prospects.
Junior bondholders including GSO Capital Partners LP and
Centerbridge Partners LP have offered to exchange their notes at a
discount for higher-ranking debt, according to people familiar with
the talks. The deal would allow the company to stave off bankruptcy
while it waits for a rebound in natural gas prices.
Meanwhile, a group of Samson lenders including Cerberus Capital
Management LP has offered to exchange its debt for ownership in the
company through a chapter 11 restructuring, according to people
familiar with the talks. That plan would wipe out Samson
shareholders, including KKR, and junior creditors, the people
said.
The rescue financing plan could face resistance, as it could
allow the junior bondholders to leapfrog the Cerberus-backed group
in the repayment line if Samson ultimately files for
bankruptcy.
Samson has posted losses of more than $4 billion since the 2011
buyout. The company earlier this year said its lenders trimmed how
much it can borrow in exchange for more leniency on how much debt
it can carry.
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com
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