Extraction Oil & Gas Inc. emerged from bankruptcy on Jan. 20 with a new E&P business and governance model led by a new executive team.
In a release, the Colorado shale producer said the company had appointed Tom Tyree as the company’s new CEO and Matt Owens as president and COO. Previously, Tyree had served as executive chairman and Owens as CEO throughout Extraction’s bankruptcy process.
Marianella Foschi rounds out Extraction’s leadership team as CFO. All leadership appointments took effect Jan. 20.
Extraction filed for Chapter 11 bankruptcy in June 2020, making it the second largest U.S. shale producer at the time to declare bankruptcy in the latest downturn. Based in Denver, the company is primarily focused in the Wattenberg Field in Colorado’s Denver-Julesburg Basin.
Benjamin Dell, who was appointed as chairman of the company’s new, seven-member board of directors, said the Extraction team had worked hard over the last six months to “right-size the business, lower its cost structure and optimize its midstream agreements.”
Dell currently serves as managing partner of Kimmeridge Energy Management Co. LLC, the private equity firm he co-founded in 2012.
“The company is now well positioned to embrace a new E&P business model focused on generating returns above the cost of capital, delivering free cash flow and, most critically, returning that free cash flow to investors,” Dell said in a statement on Jan. 20.
After successfully completing the financial restructuring process, Extraction’s capital structure now includes a new $1 billion reserve-based lending (RBL) facility with an initial borrowing base of $500 million maturing in July 2024.
Additionally, pro forma for the repaid debtor-in-possession facility and drawings under the new RBL facility, the restructuring resulted in a net reduction of approximately $1.3 billion in funded debt and preferred equity.
As part of the reorganization, Extraction’s unsecured claimants, including holders of Extraction’s senior unsecured notes, received a distribution of approximately 99% of Extraction’s newly issued common stock, which commenced trading on NASDAQ under the ticker symbol XOG, effective Jan. 20.
“The business has also instituted a new governance model where management and the board have true alignment with shareholders, while striving for environmental leadership through low-impact operations, emission reductions and reporting,” Dell added in his statement.
In addition to Dell, Extraction’s new board of directors comprises of Morris Clark, Carrie Fox, Carney Hawks, Michael Wichterich and Howard Willard. The company’s new CEO, Tyree, will also serve on the board.
Tyree currently serves as chairman of the board at Northwoods Energy LLC, a private energy company with assets in Wyoming’s Powder River Basin he founded with members of Apollo Management in January 2018.
Previously, Tyree was the co-founder, president, CFO and board member of Vantage Energy LLC, a private equity-backed E&P company which was sold to Rice Energy for $2.7 billion in late 2016. From 2003-06, he served as CFO of Bill Barrett Corp., leading its IPO in 2004. He also was an investment banker at Goldman, Sachs & Co., serving as managing director in the firm’s energy group from 1989-2003.
Tyree is also a director of Antero Resources Corp. and on the board of advisers to Project Canary, a Colorado-based company specializing in continuous, real-time air quality monitoring, which services the energy sector and other industries.
Kirkland & Ellis LLP served as Extraction’s legal counsel for the restructuring process. Moelis & Co. LLC and Petrie Partners LLC were financial advisers to the company. Alvarez & Marsal was the company’s restructuring adviser.
Bracewell LLP represented Wells Fargo Bank, National Association, as agent for the prepetition senior credit facility, in the debtor in possession credit facility and the new reserve based lending credit facility in place at Extraction Oil & Gas’ emergence from bankruptcy.
CEO Vicki Hollub said May 11 she was concerned about the possibility of a federal moratorium on new oil and gas leases going forward.
U.S. oil producers have been gradually increasing drilling activity as oil prices have rebounded but output growth has been muted as investors pressure companies to rein in spending and focus on returns.
Utilizing the technology of Denver-based Project Canary, the pilot project will extend across the energy value chain—from production, transportation and marketing of responsibility sourced natural gas—for consumer and community use locally in Colorado.