UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): March 14, 2018 (March 8, 2018)

 

 

 

EV Energy Partners, L.P.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware 001-33024 20-4745690
(State or other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

 

1001 Fannin, Suite 800
Houston, Texas
77002
(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (713) 651-1144

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

 

 

 

 

 

 

Item 1.01Entry into a Material Definitive Agreement.

 

Restructuring Support Agreement

 

On March 13, 2018, EV Energy Partners, L.P. (“EVEP”), EV Energy GP, LP, EV Management LLC, and certain of of EVEP’s wholly owned subsidiaries (such entities, each a “Debtor” and, collectively, the “Debtors”) entered into a Restructuring Support Agreement (the “RSA”) with (i) holders (collectively, the “Supporting Noteholders”) of approximately 70% of the 8.0% Senior Notes due 2019 (the “Senior Notes) issued pursuant to that certain Indenture, dated as of March 22, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), among EVEP, EV Energy Finance Corp., each of the guarantors party thereto, and Delaware Trust Company, as indenture trustee (the “Notes Trustee”) that are signatories to the RSA; (ii) lenders (collectively, the “Supporting Lenders” and, together with the Supporting Noteholders, the “Supporting Parties”) under our reserve-based lending facility (the “RBL Facility”), by and among EVEP, EV Properties, L.P., JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), BNP Paribas and Wells Fargo, National Association, as co-syndication agents, the guarantors party thereto, and the lenders signatory thereto, constituting approximately 94% of the principal amount outstanding thereunder; (iii) EnerVest, Ltd. (“EnerVest”); and (iv) EnerVest Operating, L.L.C. (“EnerVest Operating” and, together with EnerVest, the “EnerVest Parties”). Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the RSA.

 

The RSA contemplates a restructuring (the “Restructuring”) of the Debtors pursuant to a joint pre-packaged plan of reorganization (the “Plan”) consistent in all material respects with the restructuring term sheet attached to the RSA and that the Debtors will file petitions for voluntary relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on or before April 8, 2018. Neither of EnerVest nor EnerVest Operating is seeking Chapter 11 bankruptcy relief.

 

The RSA provides for certain milestones requiring, among other things, that the Debtors commence the solicitation of votes to accept or reject the Plan on or before March 16, 2018 and complete the Restructuring on or before June 22, 2018.

 

The RSA contains certain covenants on the part of each of the Debtors, the EnerVest Parties and the Supporting Parties, including limitations on the parties’ ability to pursue transactions other than the Restructuring, commitments by the Supporting Parties to vote in favor of the Plan, and commitments of the Debtors, the EnerVest Parties and the Supporting Parties to negotiate in good faith to finalize the documents and agreements governing the Restructuring. The RSA also provides for certain conditions to the obligations of the parties and for termination upon the occurrence of certain events, including without limitation, the failure to achieve certain milestones and certain breaches by the parties under the RSA.

 

A copy of the RSA is attached hereto as Exhibit 10.1 to this Form 8-K and is incorporated by reference herein. The foregoing description of the RSA is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the RSA.

 

Proposed Pre-Packaged Chapter 11 Restructuring

 

Pursuant to the RSA, the Debtors will commence the solicitation of votes on the Plan no later than March 16, 2018, by causing the Plan and a related disclosure statement (the “Disclosure Statement”) to be distributed to certain creditors of the Debtors that are “accredited investors” (as defined in Regulation D of the Securities Act of 1933, as amended). The Plan, which remains subject to the Debtors’ commencement of chapter 11 cases, confirmation by the Bankruptcy Court, and other closing conditions, provides that, among other things, on the effective date of the Plan (the “Effective Date”), subject to the occurrence and completion of certain structuring steps:

 

·the lenders under the RBL Facility that vote to accept the Plan will receive (a) pro rata loans under an amendment to the RBL Facility (the “Amended RBL Facility”), (b) cash in an amount equal to the accrued but unpaid interest payable to such lenders under the RBL Facility as of the Effective Date, and (c) unfunded commitments and letter of credit participation under the Amended RBL Facility equal to the unfunded commitments and letter of credit participation of such lender as of the Effective Date;

 

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·lenders under the RBL Facility that vote to reject the Plan will receive (a) term loans under a new term loan facility and (b) cash in an amount equal to the accrued and unpaid interest payable to such lender under the RBL Facility as of the Effective Date;

 

·the holders of the Senior Notes will receive 95% of the new common stock (subject to dilution) in the new, reorganized company, on a pro rata basis;

 

·the holders of general unsecured claims, including customers, will be paid in full or will otherwise be unimpaired; and

 

·the holders of the existing common interests in EVEP will receive 5% of the new common stock (subject to dilution) and five-year warrants for 8% of the new common stock (subject to dilution) in the new, reorganized company, on a pro rata basis, with an exercise price set at an equity value at which the holders of the Senior Notes would receive a recovery equal to par plus accrued and unpaid interest as of the Petition Date in respect of the Senior Notes (after taking into account value dilution on account of the three percent of the new common stock to be allocated to the participants in the management incentive plan on the Effective Date pursuant to a management incentive plan).

 

Omnibus Agreement Extension

 

On March 8, 2018, EVEP and EnerVest entered into an extension to the Omnibus Agreement dated September 29, 2006 between EnerVest, EV Management LLC, EV Energy GP, LP, EVEP and EV Properties, L.P. (the “Omnibus Agreement Extension”). The terms of the Omnibus Agreement Extension were approved by the Conflicts Committee of the Board of Directors of EV Management LLC, the general partner of the general partner of EVEP. Under the terms of the Omnibus Agreement Extension, a fee of $1,433,333.33 per month will be payable to EnerVest for the period from January 1, 2018 through December 31, 2018, subject to adjustment for any acquisitions or divestitures of oil and natural gas properties during such period.

 

A copy of this Omnibus Agreement Extension is attached hereto as Exhibit 10.2 to this Form 8-K and is incorporated by reference herein. The foregoing description of the Omnibus Agreement Extension is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the Omnibus Agreement Extension.

 

Item 7.01Regulation FD Disclosure.

 

Press Release

 

On March 14, 2018, EVEP issued a press release announcing the signing of the RSA and the solicitation of votes relating to the Plan, as described in Item 1.01. A copy of the press release is being furnished as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.

 

Disclosure Pursuant to Confidentiality Agreements

 

In September 2017, EVEP commenced discussions with advisors to certain holders of the Senior Notes regarding a potential restructuring transaction (a “Possible Restructuring”). In October 2017, EVEP executed confidentiality agreements (the “Confidentiality Agreements”) with such advisors. On November 22, 2017 EVEP executed Confidentiality Agreements with certain Supporting Noteholders to facilitate discussions concerning the Possible Restructuring and on March 2, 2018, EVEP executed Confidentiality Agreements with additional Supporting Noteholders.

 

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Pursuant to the Supporting Noteholders’ Confidentiality Agreements, EVEP agreed to publicly disclose certain information, including any material non-public information disclosed to the Supporting Noteholders (the “Cleansing Materials”), upon the occurrence of certain events set forth in the Supporting Noteholders’ Confidentiality Agreements. Copies of the Cleansing Materials, including (i) a management presentation provided to the Supporting Noteholders, and (ii) a management presentation provided to the Supporting Noteholders on the 2018 budget of the Company are attached as Exhibit 99.2 and Exhibit 99.3, respectively, to this Form 8-K.

 

Any financial projections or forecasts included in the Cleansing Materials were not prepared with a view toward public disclosure or compliance with the published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present EVEP’s financial condition or results of operations in accordance with accounting principles generally accepted in the United States. EVEP’s independent public accountants have not examined, compiled or otherwise applied procedures to the projections and, accordingly, do not express an opinion or any other form of assurance with respect to the projections. The inclusion of the projections therein should not be regarded as an indication that EVEP or its affiliates or representatives consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such. Neither EVEP nor any of its affiliates or representatives has made or makes any representation to any person regarding the ultimate outcome of the Restructuring compared to the projections, and none of them undertakes any obligation to publicly update the projections to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the projections are shown to be in error.

 

Disclosure Statement

 

As described above, the Disclosure Statement will be distributed to certain creditors of the Company on March 14, 2018. A copy of the Disclosure Statement is being furnished as Exhibit 99.4 and is incorporated into this Item 7.01 by reference.

 

The information furnished pursuant to Item 7.01 in this Current Report on Form 8-K, including Exhibits 99.1. 99.2, 99.3 and 99.4 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. You should not assume that the information contained in this Current Report on Form 8-K or the accompanying Exhibits is accurate as of any date other than the date of each such document. Our business, financial condition, results of operations, prospects and the assumptions that were utilized may have changed since those dates.

 

Item 8.01Other Events.

 

EVEP cautions that trading in EVEP’s securities during the pendency of the anticipated chapter 11 cases is highly speculative and poses substantial risks. Trading prices for EVEP’s securities may bear little or no relationship to the actual recovery, if any, by holders of EVEP’s securities in the anticipated chapter 11 cases.

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that EVEP expects, believes or anticipates will or may occur in the future are forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this Current Report, in our most recent Annual Report on Form 10-K for the year ended December 31, 2016, and in each of our Quarterly Reports on Form 10-Q filed during 2017, as well as in other reports filed from time to time by EVEP with the Securities and Exchange Commission, most of which are beyond our control. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this Current Report are forward-looking statements. Although we believe that the forward-looking statements contained in this Current Report are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this Current Report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

 

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Any forward-looking statement speaks only as of the date on which such statement is made and EVEP undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

 

These forward-looking statements relate, in part, to (i) EVEP’s ability to obtain approval by the Bankruptcy Court of the Plan or any other plan of reorganization, including the treatment of the claims of EVEP’s lenders and trade creditors, among others; (ii) EVEP’s ability to obtain approval with respect to motions in the chapter 11 cases and the Bankruptcy Court’s rulings in the chapter 11 cases and the outcome of the chapter 11 cases in general; (iii) the length of time the Debtors will operate under the chapter 11 cases; (iv) risks associated with third-party motions in the chapter 11 cases, which may interfere with the Debtors’ ability to develop and consummate the Plan or other plan of reorganization; (v) the potential adverse effects of the chapter 11 cases on the Debtors’ liquidity, results of operations or business prospects; (vi) the ability to execute EVEP’s business and restructuring plan; (vii) increased legal and advisor costs related to the chapter 11 cases and other litigation and the inherent risks involved in a bankruptcy process; and (viii) other factors disclosed by EVEP from time to time in its filings with the SEC, including those described under the caption “Risk Factors” in EVEP’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law.

 

Item 9.01Financial Statements and Exhibits.

 

(d)Exhibits

 

Exhibit
Number
  Description
10.1   Restructuring Support Agreement, dated as of March 13, 2018, among the Debtors, the Supporting Parties and the EnerVest Parties.
10.2   Omnibus Agreement Extension, dated March 8, 2018, by and between EnerVest, Ltd. and EV Energy GP, L.P.
99.1   Press Release dated March 14, 2018.
99.2   Management Presentation of EVEP to Supporting Noteholders.
99.3   Management Presentation of EVEP to Supporting Noteholders on 2018 Budget.
99.4   Disclosure Statement for Debtors’ Joint Pre-Packaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 14, 2018 EV Energy Partners, L.P.
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Chief Financial Officer of EV Management LLC,
    General partner of EV Energy, GP, L.P.,
    General partner of EV Energy Partners, L.P.

 

 

 

 

Exhibit 10.1

 

Execution Version

 

 
EV Energy Partners, L.P.
 

restructuring support agreement

 

March 13, 2018

 

 

 

This Restructuring Support Agreement (together with the exhibits and schedules attached hereto, which includes, without limitation, the Restructuring Term Sheet and the RBL Term Sheet (each as defined below), as each may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”),1 dated as of March 13, 2018, is entered into by and among: (i) EV Energy Partners, L.P. (“EVEP”), EV Energy GP, LP EV Management LLC, and certain of EVEP’s wholly owned subsidiaries (such entities, each a “Debtor” and, collectively, the “Debtors”);2 (ii) the undersigned holders or investment managers for certain funds and/or managed accounts that are holders of senior notes (the “Noteholders”) issued pursuant to that certain Indenture, dated as of March 22, 2011 (as amended, restated, modified, supplemented, or replaced from time to time prior to the Petition Date, the “Indenture”), for the 8.0% Senior Notes due 2019 (the “Notes”) among EVEP, EV Energy Finance Corp., each of the guarantors party thereto, and U.S. Bank National Association, as indenture trustee (the “Notes Trustee”) that are (and any Noteholder that may become in accordance with Section 15 and/or Section 16 hereof) signatories hereto (collectively, the “Consenting Noteholders”); (iii) the lenders (collectively, the “RBL Lenders”) party to that reserve-based lending facility (the “RBL Facility”) arising under that certain Second Amended and Restated Credit Agreement dated as of April 26, 2011 (as amended, restated, modified, supplemented, or replaced from time to time prior to the Petition Date, the “Credit Agreement”) by and among EVEP, EV Properties, L.P., as borrower, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “RBL Agent”), BNP Paribas and Wells Fargo, National Association, as co-syndication agents, BBVA Compass and Citibank, N.A., as co-documentation agents, and the guarantors party thereto (as may be amended and restated, or otherwise modified from time to time the “RBL Credit Agreement”) that are (and any that may become in accordance with Section 15 and/or Section 16 hereof) signatories hereto (collectively, the “Consenting RBL Lenders”)3; and (iv) EnerVest, Ltd. (“EnerVest”), and EnerVest Operating, L.L.C. (collectively, the “EnerVest Parties”). This Agreement collectively refers to the Debtors, the Consenting Noteholders, the Consenting RBL Lenders, and the EnerVest Parties as the “Parties” and, each individually, as a “Party.”

 

 

 

  1 Unless otherwise noted, capitalized terms used but not immediately defined herein shall have the meanings ascribed to them at a later point in this Agreement, the Restructuring Term Sheet, or the RBL Term Sheet.

 

  2 Until the occurrence of an RSA Termination Date, every entity that is a Debtor (as defined below) shall be a party to this Agreement.

 

  3 For the purposes of this Agreement, the term “Consenting RBL Lender” shall mean the business unit defined in the signature blocks appended hereto for such RBL Lender.

 

 

 

 

RECITALS

 

WHEREAS, the Parties have engaged in good faith, arm’s-length negotiations regarding restructuring transactions (the “Restructuring”) pursuant to the terms and conditions set forth in this Agreement, including a joint pre-packaged plan of reorganization for the Debtors (the “Pre-Packaged Plan”) on terms consistent in all respects with: (a) the restructuring term sheet attached hereto as Exhibit A (as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with this Agreement, the “Restructuring Term Sheet”) and (b) the term sheet attached hereto as Exhibit B (as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with this Agreement the “RBL Term Sheet), each as incorporated herein by reference pursuant to Section 2 hereof;

 

WHEREAS, it is anticipated that the Restructuring will be implemented through jointly-administered voluntary cases commenced by the Debtors (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (as amended, the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), and pursuant to the Pre-Packaged Plan, which will be filed by the Debtors in the Chapter 11 Cases;

 

NOW, THEREFORE, in consideration of the promises, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:

 

AGREEMENT

 

1.          RSA Effective Date. This Agreement shall become effective, and the obligations contained herein shall become binding upon the Parties, upon the first date (such date, the “RSA Effective Date”) that (i) this Agreement has been executed by (a) each Debtor; (b) Consenting Noteholders holding, in aggregate, at least 66 2/3% in principal amount outstanding of all Notes Claims;4 (c) Consenting RBL Lenders holding, in aggregate, at least 66 2/3% in principal amount outstanding of all RBL Claims5; and (d) each of the EnerVest Parties and (ii) all of the outstanding fees and expenses incurred and invoiced as of the date of this Agreement that are required to be paid under Section 7(c) shall have been paid.

 

2.          Exhibits and Schedules Incorporated by Reference. Each of the exhibits attached hereto (and any schedules to such exhibits) (collectively, the “Exhibits and Schedules”) is expressly incorporated herein and made a part of this Agreement, and all references to this Agreement shall include the Exhibits and Schedules. In the event of any inconsistency between this Agreement (without reference to the Exhibits and Schedules) and the Exhibits and Schedules, this Agreement (without reference to the Exhibits and Schedules) shall govern.

 

 

  4 Notes Claims” shall mean all Claims (as defined in the Bankruptcy Code) and obligations arising under or related to the Notes.

 

  5 RBL Claims” shall mean all Claims (as defined in the Bankruptcy Code) and obligations arising under or related to the RBL Facility.

 

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3.          Restructuring Documents. The definitive documents and agreements governing the Restructuring (the “Restructuring Documents”) shall include: (a) the Pre-Packaged Plan (and all exhibits thereto) and the confirmation order with respect to the Pre-Packaged Plan (the “Confirmation Order”); (b) the related disclosure statement (and all exhibits thereto) with respect to the Pre-Packaged Plan (the “Disclosure Statement”); (c) the solicitation materials with respect to the Pre-Packaged Plan (collectively, the “Solicitation Materials”); (d) the interim order approving the Debtors use of cash collateral (the “Interim Cash Collateral Order”) and the final order approving the Debtors’ use of cash collateral (the “Final Cash Collateral Order,” and together with the Interim Cash Collateral Order, the “Cash Collateral Orders”); (e) the Amended RBL Credit Agreement; (f) documents in respect of the Alternative Term Loan Facility (as defined in the Restructuring Term Sheet) (if necessary); (g) the New Warrant Agreement and the New Warrants (each as defined in the Restructuring Term Sheet); (h) the organizational and governance documents for the Reorganized Debtors (and/or any new entity created as part of the Restructuring), including, as applicable, certificates of incorporation, certificates of formation or certificates of limited partnership (or equivalent organizational documents), bylaws, limited liability company agreements, limited partnership agreements, shareholders agreements, operating agreements (or equivalent governing documents) and/or registration rights agreements (collectively, the “Corporate Governance Documents”); (i) the New Omnibus Agreement (as defined in the Restructuring Term Sheet); (j) any agreements governing the MIP (as defined in the Restructuring Term Sheet); (k) such other definitive documentation relating to the Restructuring as is necessary or desirable to consummate the Restructuring and the Pre-Packaged Plan; and (l) any other agreement, instruments, pleadings seeking or responding to a request for substantive relief, orders and/or documents seeking substantive relief (including substantive “first day” motions and the related orders) that are filed by the Debtors in the Chapter 11 Cases (including any exhibits, amendments, modifications or supplements made thereto from time to time). The Restructuring Documents identified in the foregoing sentence remain subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent in all material respect with the terms of this Agreement. Any document that is included within the definition of “Restructuring Documents,” including any amendment, supplement, or modification thereof, shall be in a form and substance satisfactory to the (i) Debtors, (ii) Noteholders holding more than 50% in principal amount outstanding of the Notes Claims held by the Consenting Noteholders or their transferees pursuant to a valid transfer under this Agreement (“Required Consenting Noteholders”), and (iii) RBL Lenders holding more than 50% in principal amount outstanding of the RBL Claims held by the Consenting RBL Lenders or their transferees pursuant to a valid transfer under this Agreement (“Required Consenting RBL Lenders”) solely with respect to (1) the documents listed in parts (a), (b), (c), (d), (e), and (f) of this section and (2) the documents listed in parts (k) and (l) of this section that have a material impact on the RBL Lenders; provided that (x) the New Omnibus Agreement shall be in form and substance satisfactory to the Debtors, the Required Consenting Noteholders and the EnerVest Parties and (y) the Corporate Governance Documents shall be in form and substance satisfactory to the Required Consenting Noteholders in their sole discretion (provided that the Corporate Governance Documents shall also be subject to the consent of the Debtors (which consent shall not be unreasonably withheld, conditioned, or delayed)).

 

4.          Milestones. As provided in and subject to Section  6, the Debtors shall implement the Restructuring on the following timeline (each deadline, a “Milestone”):

 

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(a)the Debtors shall commence the solicitation of votes to accept or reject the Pre-Packaged Plan on or before March 16, 2018 and, in connection with such solicitation, establish a date no later than March 30, 2018 as the deadline to submit votes to accept or reject such Pre-Packaged Plan;

 

(b)no later than April 8, 2018, the Debtors shall commence the Chapter 11 Cases by filing bankruptcy petitions with the Bankruptcy Court (such filing date, the “Petition Date”);

 

(c)on the Petition Date, the Debtors shall file the Pre-Packaged Plan and Disclosure Statement (excluding any plan supplement or exhibits to the Pre-Packaged Plan);

 

(d)no later than (i) the earlier of (x) seven days after the Petition Date and (y) the date that is one Business Day after other customary first day orders are entered by the Bankruptcy Court, the Bankruptcy Court shall have entered the Interim Cash Collateral Order and (ii) 45 days after the Petition Date, the Bankruptcy Court shall have entered the Final Cash Collateral Order;

 

(e)no later than 45 days after the Petition Date, the Bankruptcy Court shall have entered the Confirmation Order that has become a Final Order6; and

 

(f)no later than 75 days after the Petition Date, the Debtors shall consummate the transactions contemplated by the Pre-Packaged Plan (the date of such consummation, the “Effective Date”).

 

The Debtors may extend a Milestone with the express prior written consent of the Required Consenting Noteholders and the Required Consenting RBL Lenders.

 

5.          Commitment of Consenting Noteholders. Each Consenting Noteholder shall (severally, and not jointly and severally), solely as it remains the legal owner, beneficial owner, and/or investment advisor or manager of or with power and/or authority to bind any Claims held by it, from the RSA Effective Date until the occurrence of an RSA Termination Date (as defined below):

 

 

  6 Final Order” means an order or judgment of the Bankruptcy Court (or any other court of competent jurisdiction) entered by the Clerk of the Bankruptcy Court (or such other court) on the docket in the Chapter 11 Cases (or the docket of such other court), which has not been modified, amended, reversed, vacated or stayed and as to which (x) the time to appeal, petition for certiorari, or move for a new trial, stay, reargument or rehearing has expired and as to which no appeal, petition for certiorari or motion for new trial, stay, reargument or rehearing shall then be pending or (y) if an appeal, writ of certiorari, new trial, stay, reargument or rehearing thereof has been sought, such order or judgment of the Bankruptcy Court (or other court of competent jurisdiction) shall have been affirmed by the highest court to which such order was appealed, or certiorari shall have been denied, or a new trial, stay, reargument or rehearing shall have been denied or resulted in no modification of such order, and the time to take any further appeal, petition for certiorari or move for a new trial, stay, reargument or rehearing shall have expired, as a result of which such order shall have become final in accordance with Rule 8002 of the Federal Rules of Bankruptcy Procedure; provided that no order shall fail to be a Final Order solely due to the possibility that a motion pursuant to section 502(j) of the Bankruptcy Code, Rules 59 or 60 of the Federal Rules of Civil Procedure, or Rule 9024 of the Bankruptcy Rules may be filed with respect to such order.

 

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(a)support and cooperate with the Debtors to take all commercially reasonable actions necessary to consummate the Restructuring in accordance with the Pre-Packaged Plan and the terms and conditions of this Agreement, the Restructuring Term Sheet, and the RBL Term Sheet (but without limiting consent and approval rights provided in this Agreement or the Restructuring Documents), including: (i) timely voting all of its Claims against, or interests in, as applicable, the Debtors now or hereafter owned by such Consenting Noteholder (or for which such Consenting Noteholder now or hereafter has voting control over) to accept the Pre-Packaged Plan in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials upon receipt of Solicitation Materials; (ii) timely returning a duly-executed ballot in connection therewith; and (iii) supporting and not opting out of any releases under the Pre-Packaged Plan;

 

(b)not withdraw, amend, or revoke (or cause to be withdrawn, amended, or revoked) its vote with respect to the Pre-Packaged Plan;

 

(c)not, directly or indirectly, object to, delay, impede, or take any other action to interfere with the acceptance or implementation of the Restructuring, including, without limitation, (i) initiating or joining any legal proceeding, objecting, directly or indirectly, to the Pre-Packaged Plan or the Restructuring Documents or (ii) negotiating or proposing, filing, supporting, or voting for any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger, or restructuring of EVEP or any of its subsidiaries that is inconsistent with or that would be reasonably likely to prevent, delay, or impede the consummation of the Restructuring;

 

(d)not take any action (or encourage or instruct any other party to take any action) in respect of any “Default” or an “Event of Default” under the Indenture that (i) exist as of the RSA Effective Date or (ii) are a result of the commencement of the Chapter 11 Cases or the undertaking of any Debtor hereunder to implement the Restructuring through the Chapter 11 Cases;

 

(e)provide prompt written notice to EVEP between the date hereof and the Effective Date of the Pre-Packaged Plan of (i) the occurrence, or failure to occur, of any event of which the occurrence or failure to occur would be reasonably likely to cause (A) any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect, (B) any material covenant contained in this Agreement not to be satisfied in any material respect, or (C) any condition precedent contained in the Pre-Packaged Plan or this Agreement not to occur or become impossible to satisfy, (ii) receipt of any written notice from any third party alleging that the consent of such party is or may be required as a condition precedent to consummation of the transactions contemplated by the Restructuring, (iii) receipt of any written notice from any governmental body that is material to the consummation of the transactions contemplated by the Restructuring, (iv) receipt of any written notice of any proceeding commenced or threatened against any Party that would otherwise affect in any material respect the transactions contemplated by the Restructuring, and (v) any failure of such Consenting Noteholder to comply, in any material respect, with or satisfy any covenant, condition or agreement to be complied with or satisfied by them hereunder as a condition precedent to the consummation of the transactions contemplated by the Restructuring; and

 

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(f)not take any other action that is materially inconsistent with its obligations under this Agreement.

 

Notwithstanding the foregoing, nothing in this Agreement and neither a vote to accept the Pre-Packaged Plan by any Consenting Noteholder nor the acceptance of the Pre-Packaged Plan by any Consenting Noteholder shall (x) be construed to prohibit any Consenting Noteholder from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as, from the RSA Effective Date until the occurrence of an RSA Termination Date applicable to such Consenting Noteholder, such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement and are not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring, (y) affect the ability of any Consenting Noteholder to consult with other Consenting Noteholders or the Debtors or (subject to all terms and conditions of any applicable confidentiality arrangements) the RBL Agent, the RBL Lenders, or the EnerVest Parties, provided that such consultation is not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring, or (z) impair or waive the rights of any Consenting Noteholder to assert or raise any objection permitted under this Agreement in connection with any hearing on confirmation of the Pre-Packaged Plan or in the Bankruptcy Court or prevent such Consenting Noteholder from enforcing this Agreement against the Debtors, the EnerVest Parties, the Consenting RBL Lenders, or any other Consenting Noteholder.

 

6.          Commitment of Consenting RBL Lenders. Each Consenting RBL Lender shall (severally, and not jointly and severally), solely as it remains the legal owner, beneficial owner, and/or investment advisor or manager of or with power and/or authority to bind any Claims held by it, from the RSA Effective Date until the occurrence of an RSA Termination Date (as defined below):

 

(a)support and cooperate with the Debtors to take all commercially reasonable actions necessary to consummate the Restructuring in accordance with the Pre-Packaged Plan and the terms and conditions of this Agreement, the Restructuring Term Sheet, and the RBL Term Sheet (but without limiting consent and approval rights provided in this Agreement or the Restructuring Documents), including: (i) timely vote all of its Claims against, or interests in, as applicable, the Debtors now or hereafter owned by such Consenting RBL Lender (or for which such Consenting RBL Lender now or hereafter has voting control over) to accept the Pre-Packaged Plan in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials upon receipt of Solicitation Materials; (ii) timely return a duly-executed ballot in connection therewith; and (iii) support and not opt out of any releases under the Pre-Packaged Plan so long as such Consenting RBL Lender is a beneficiary of such releases;

 

 6 

 

(b)not withdraw, amend, or revoke (or cause to be withdrawn, amended, or revoked) its vote with respect to the Pre-Packaged Plan;

 

(c)not, directly or indirectly, object to, delay, impede, or take any other action to interfere with the acceptance or implementation of the Restructuring, including, without limitation, (i) initiating or joining any legal proceeding, objecting, directly or indirectly, to the Pre-Packaged Plan or the Restructuring Documents or (ii) negotiating or proposing, filing, supporting, or voting for any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger, or restructuring of EVEP or any of its subsidiaries that is inconsistent with or that would be reasonably likely to prevent, delay, or impede the consummation of the Restructuring;

 

(d)not take any action (or encourage or instruct any other party to take any action) in respect of any “Default” or an “Event of Default” under the Credit Agreement that (i) exist as of the RSA Effective Date or (ii) are a result of the commencement of the Chapter 11 Cases or the undertaking of any Debtor hereunder to implement the Restructuring through the Chapter 11 Cases;

 

(e)provide prompt written notice to EVEP between the date hereof and the Effective Date of the Pre-Packaged Plan of (i) the occurrence, or failure to occur, of any event of which the occurrence or failure to occur would be reasonably likely to cause (A) any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect, (B) any material covenant contained in this Agreement not to be satisfied in any material respect, or (C) any condition precedent contained in the Pre-Packaged Plan or this Agreement not to occur or become impossible to satisfy, (ii) receipt of any written notice from any third party alleging that the consent of such party is or may be required as a condition precedent to consummation of the transactions contemplated by the Restructuring, (iii) receipt of any written notice from any governmental body that is material to the consummation of the transactions contemplated by the Restructuring, (iv) receipt of any written notice of any proceeding commenced or threatened against any Party that would otherwise affect in any material respect the transactions contemplated by the Restructuring, and (v) any failure of such Consenting RBL Lender to comply, in any material respect, with or satisfy any covenant, condition or agreement to be complied with or satisfied by them hereunder as a condition precedent to the consummation of the transactions contemplated by the Restructuring; and

 

 7 

 

(f)not take any other action that is materially inconsistent with its obligations under this Agreement.

 

Notwithstanding the foregoing, nothing in this Agreement and neither a vote to accept the Pre-Packaged Plan by any Consenting RBL Lender nor the acceptance of the Pre-Packaged Plan by any Consenting RBL Lender shall (x) be construed to prohibit any Consenting RBL Lender from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as, from the RSA Effective Date until the occurrence of an RSA Termination Date applicable to such Consenting RBL Lender, such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement and are not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring, (y) affect the ability of any Consenting RBL Lender to consult with other Consenting RBL Lenders or the Debtors or (subject to all terms and conditions of any applicable confidentiality arrangements) the Notes Trustee, the Noteholders, or the EnerVest Parties, provided that such consultation is not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring, or (z) impair or waive the rights of any Consenting RBL Lender to assert or raise any objection permitted under this Agreement in connection with any hearing on confirmation of the Pre-Packaged Plan or in the Bankruptcy Court or prevent such Consenting RBL Lender from enforcing this Agreement against the Debtors, the EnerVest Parties, the Consenting Noteholders, or any other Consenting RBL Lender.

 

Notwithstanding anything to the contrary in this Agreement, RBL Claims (as defined below), other Claims, equity interests, actions or activities of a Consenting RBL Lender subject to this Agreement shall not include any RBL Claims, Claims, equity interests, actions or activities held or performed in a fiduciary capacity or held, acquired or performed by any other division, business unit or trading desk of such Consenting RBL Lender (other than the division, business unit or trading desk expressly identified on the signature pages hereto), unless and until such division, business unit or trading desk is or becomes a party to this Agreement.

 

7.          Commitment of the Debtors. Subject to the terms and conditions hereof, and except as the Required Consenting Noteholders and Required Consenting RBL Lenders may expressly release the Debtors in writing from any of the following obligations (which release may be withheld, conditioned or delayed by Required Consenting Noteholders and the Required Consenting RBL Lenders in their sole discretion):

 

(a)Each of the Debtors (i) agrees to (A) support and complete the Restructuring as set forth in the Pre-Packaged Plan and this Agreement, (B) negotiate in good faith all Restructuring Documents that are subject to negotiation as of the RSA Effective Date and take any and all necessary and appropriate actions in furtherance of the Restructuring, the Pre-Packaged Plan and this Agreement, and (C) make commercially reasonable efforts to complete the Restructuring in accordance with each Milestone set forth in Section 4 of this Agreement, and (ii) shall not undertake any action materially inconsistent with the adoption and implementation of the Pre-Packaged Plan and the speedy confirmation thereof, including, without limitation, filing any motion to reject this Agreement.

 

 8 

 

(b)Each of the Debtors agrees to provide prompt written notice to the Consenting Noteholders and the Consenting RBL Lenders between the date hereof and the Effective Date of the Pre-Packaged Plan of (i) the occurrence, or failure to occur, of any event of which the occurrence or failure to occur would be reasonably likely to cause (A) any representation or warranty of the Debtors contained in this Agreement to be untrue or inaccurate in any material respect, (B) any covenant of the Debtors contained in this Agreement not to be satisfied in any material respect, or (C) any condition precedent contained in the Pre-Packaged Plan or this Agreement not to occur or become impossible to satisfy, (ii) receipt of any written notice from any third party alleging that the consent of such party is or may be required as a condition precedent to consummation of the transactions contemplated by the Restructuring, (iii) receipt of any written notice from any governmental body that is material to the consummation of the transactions contemplated by the Restructuring, (iv) receipt of any written notice of any proceeding commenced or threatened against the Debtors that would otherwise affect in any material respect the transactions contemplated by the Restructuring, and (v) any failure of the Debtors to comply, in any material respect, with or satisfy any covenant, condition, or agreement to be complied with or satisfied by them hereunder as a condition precedent to the consummation of the transactions contemplated by the Restructuring.

 

(c)The Debtors shall pay the reasonable and documented fees and expenses of: (i) the ad hoc committee of Noteholders (the “Ad Hoc Noteholder Committee”),7 whether incurred before or after the Petition Date, limited to the reasonable and documented fees and expenses of Akin Gump Strauss Hauer & Feld LLP (“Akin Gump”), as lead counsel, one local counsel and Intrepid Partners, LLC, as financial advisor (together, the “Consenting Noteholder Advisors”), in each case, after receipt of applicable invoices and in accordance with engagement letters of such professionals; and (ii) the RBL Agent, whether incurred before or after the Petition Date, limited to the reasonable and documented fees and expenses of Simpson Thacher & Bartlett LLP, as lead counsel (“Simpson Thacher”), one local counsel, and RPA Advisors, as financial advisor (together, the “RBL Agent Advisors”), in each case, after receipt of applicable invoices; provided that the timing of the payment of such fees and expenses incurred after the Petition Date shall be subject to the terms of the Cash Collateral Orders and/or the Pre-Packaged Plan; provided, further, that the Debtors shall also promptly reimburse each member of the Ad Hoc Noteholder Committee and each Consenting RBL Lender in cash for all reasonable and documented out-of-pocket costs or expenses (which expenses shall not include additional professionals’ fees without the prior written consent of the Debtors) incurred by such Ad Hoc Noteholder Committee member or such Consenting RBL Lender in connection with this Agreement or the Restructuring.

 

 

  7 The “Ad Hoc Noteholder Committee” shall mean that certain ad hoc group of Noteholders represented by Akin Gump Strauss Hauer & Feld LLP.

 

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(d)The Debtors shall (i) operate the business of the Debtors in the ordinary course in a manner that is consistent with this Agreement and past practices, and use commercially reasonable efforts to preserve intact the Debtors’ business organization and relationships with third parties and employees, (ii) subject to applicable non-disclosure agreements and the terms thereof, keep the Consenting Noteholders and the Consenting RBL Lenders reasonably informed about the operations of the Debtors, (iii) subject to applicable non-disclosure agreements and the terms thereof, provide the Consenting Noteholders and the Consenting RBL Lenders any information reasonably requested regarding the Debtors and provide, and direct the Debtors’ employees, officers, advisors and other representatives to provide, to the Consenting Noteholder Advisors and the RBL Agent Advisors, (A) reasonable access during normal business hours to the Debtors’ books, records and facilities, and (B) reasonable access to the management and advisors of the Debtors for the purposes of evaluating the Debtors’ assets, liabilities, operations, businesses, finances, strategies, prospects and affairs; and (iv) promptly notify the Consenting Noteholders and the Consenting RBL Lenders of any governmental or third party complaints, litigations, investigations or hearings (or communications indicating that the same may be contemplated or threatened).

 

(a)Except as otherwise expressly contemplated by this Agreement or the Pre-Packaged Plan, the Debtors agree (i) to prepare or cause to be prepared the applicable Restructuring Documents within the Debtors’ control (including all relevant motions, applications, orders, agreements and other documents), (ii) to provide draft copies of the Restructuring Documents within the Debtors’ control, and all other pleadings and documents the Debtors intend to file with the Bankruptcy Court, in each case, to Akin Gump and Simpson Thacher as soon as reasonably practicable before such documents are to be filed with the Bankruptcy Court; provided that each such pleading or document shall be consistent in all material respect with, and shall otherwise contain, the terms and conditions set forth in this Agreement, the Restructuring Term Sheet, and the RBL Term Sheet, and such other terms and conditions as are reasonably acceptable to the Debtors, the Required Consenting Noteholders, and the Required Consenting RBL Lenders (subject to any limitations on the consent rights of the Consenting RBL Lenders as set forth in Section 3); and (iii) without limiting any approval rights set forth herein, consult in good faith with Akin Gump and Simpson Thacher (as applicable) regarding the form and substance of any of the foregoing documents in advance of the filing, execution, distribution or use (as applicable) thereof.

 

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(b)Subject to the last paragraph of this Section 7 and Section 11(c) hereof, the Debtors shall (i) cease and cause to be terminated any ongoing solicitation, discussions and negotiations with respect to any alternative transaction other than the Restructuring set forth in this Agreement, (ii) not, directly or indirectly, seek, solicit, negotiate, support, engage in or initiate discussions relating to, or enter into any agreements relating to, any alternative transaction other than the Restructuring set forth in this Agreement, and (iii) not solicit or direct any Person (as defined below), including any of their representatives or members of the Debtors’ board of directors (or equivalent) or any direct or indirect holders of existing equity securities of EVEP, to undertake any of the foregoing. For purposes of this Agreement, “Person” shall mean an individual, a partnership, a joint venture, a limited liability company, a corporation, a trust, an unincorporated organization, a group, a governmental or regulatory authority, or any legal entity or association.

 

(c)The Debtors agree to file timely a formal objection to any motion filed with the Bankruptcy Court by any Person seeking the entry of an order (A) directing the appointment of an examiner or a trustee, (B) converting any Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code or (C) dismissing any of the Chapter 11 Cases.

 

Notwithstanding anything to the contrary herein, but without limiting any termination event that might result hereunder, nothing in this Agreement shall require the directors, officers, or managers of any Debtor (in such person’s capacity as a director, officer, or manager of such Debtor) to take any action, or to refrain from taking any action, to the extent taking such action or refraining to take such action would be reasonably like to result in a breach of such director’s, officer’s, or manager’s fiduciary obligations under applicable law, as determined in good faith (after consultation with outside counsel).

 

8.          Commitment of the EnerVest Parties. Each EnerVest Party (severally, and not jointly and severally) shall, from the RSA Effective Date until the occurrence of an RSA Termination Date or an EnerVest Termination Date (as defined below):

 

(a)support and cooperate with the Debtors, the Consenting Noteholders, and the Consenting RBL Lenders to take all commercially reasonable actions necessary to consummate the Restructuring in accordance with the Pre-Packaged Plan and the terms and conditions of this Agreement, the Restructuring Term Sheet, and the RBL Term Sheet, including, if applicable: (i) timely voting all of its Claims against, or interests in the Debtors now or hereafter owned by such EnerVest Party to accept the Pre-Packaged Plan in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials upon receipt of Solicitation Materials; (ii) timely returning a duly-executed ballot in connection therewith; and (iii) supporting and not opting out of any releases under the Pre-Packaged Plan;

 

 11 

 

(b)not withdraw, amend, or revoke (or cause to be withdrawn, amended, or revoked) its vote, if applicable, with respect to the Pre-Packaged Plan;

 

(c)not object to, delay, impede, or take any other action to interfere with the acceptance or implementation of the Restructuring, including, without limitation, (i) initiating or joining any legal proceeding, objecting, directly or indirectly, to the Pre-Packaged Plan, (ii) negotiating or proposing, filing, supporting, or voting for any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger, or restructuring of EVEP or any of its subsidiaries that is inconsistent with or that would be reasonably likely to prevent, delay, or impede the consummation of the Restructuring;

 

(d)if applicable, (i) continue to satisfy, consistent with past practice, all obligations to the Debtors under the Existing Omnibus Agreement (as defined in the Restructuring Term Sheet) and any joint operating agreements and other operating agreements to which the Debtors and any EnerVest Party are a party and (ii) negotiate, in good faith, the terms of the New Omnibus Agreement and any modifications to the joint operating agreements and other operating agreements to which the Debtors and any EnerVest Party are a party; and

 

(e)not take any other action that is materially inconsistent with its obligations under this Agreement.

 

Notwithstanding the foregoing, nothing in this Agreement and neither a vote to accept the Pre-Packaged Plan by any EnerVest Party nor the acceptance of the Pre-Packaged Plan by any EnerVest Party shall (x) be construed to prohibit any EnerVest Party from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as, from the RSA Effective Date until the occurrence of an RSA Termination Date or EnerVest Termination Date applicable to such EnerVest Party, such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement and are not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring, (y) affect the ability of any EnerVest Party to consult with any other EnerVest Party or the Debtors or (subject to all terms and conditions of any applicable confidentiality arrangements) the Consenting Noteholders and the Consenting RBL Lenders, provided that such consultation is not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring or (z) impair or waive the rights of any EnerVest Party to assert or raise any objection permitted under this Agreement in connection with any hearing on confirmation of the Pre-Packaged Plan or in the Bankruptcy Court or prevent such EnerVest Party from enforcing this Agreement against the Debtors, the Consenting Noteholders, the Consenting RBL Lenders, or any other EnerVest Party.

 

 12 

 

9.          Consenting Noteholder Termination Events. Required Consenting Noteholders shall have the right, but not the obligation, upon written notice to the other Parties, to terminate the obligations of the Consenting Noteholders under this Agreement upon the occurrence of any of the following events, unless waived, in writing, by Required Consenting Noteholders on a prospective or retroactive basis (each, a “Noteholder Termination Event”):

 

(a)the failure to meet any of the Milestones in Section 4 unless (i) such failure is the result of any act, omission, or delay on the part of any of the Required Consenting Noteholders seeking termination in violation of its obligations under this Agreement or (ii) such Milestone is extended in accordance with Section 4;

 

(b)if the Bankruptcy Court enters an order (i) dismissing any of the Chapter 11 Cases, (ii) converting any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code other than as contemplated by the Restructuring, (iii) appointing a trustee or an examiner with expanded powers pursuant to Bankruptcy Code section 1104 in any of the Chapter 11 Cases, (iv) terminating the Debtors’ exclusive right to file a plan or plans of reorganization pursuant to Bankruptcy Code section 1121, or (v) making a finding of fraud, dishonesty or misconduct by any executive, officer or director of the Debtors, regarding or relating to the Debtors, without the consent of the Required Consenting Noteholders;

 

(c)the Debtors file, without the prior written consent of the Required Consenting Noteholders, any motion or any request for relief seeking to (i) dismiss any of the Chapter 11 Cases, (ii) convert any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, or (iii) appoint a trustee or examiner pursuant to Bankruptcy Code section 1104 in any of the Chapter 11 Cases;

 

(d)upon the Debtors’ withdrawal, waiver, amendment or modification, or the filing of (or announced intention to file) a pleading seeking to withdraw, waive, amend or modify any of the Restructuring Documents, including motions, notices, exhibits, appendices and orders, in a manner not reasonably acceptable in form and substance to the Required Consenting Noteholders;

 

(e)the issuance by any governmental authority, including the Bankruptcy Court, any regulatory authority, or any other court of competent jurisdiction, of any ruling or order enjoining or otherwise making impractical the substantial consummation of the Restructuring on the terms and conditions set forth in the Restructuring Term Sheet, the RBL Term Sheet, or the Pre-Packaged Plan; provided that the Debtors shall have ten (10) business days after issuance of such ruling or order to obtain relief that would allow consummation of the Restructuring in a manner that (i) does not prevent or diminish in a material way compliance with the terms of this Agreement and the Pre-Packaged Plan, and (ii) is acceptable to the Required Consenting Noteholders;

 

 13 

 

(f)a material breach by any Debtor of any representation, warranty, or covenant of such Debtor set forth in this Agreement that could reasonably be expected to delay, prevent, or hinder, other than in a de minimis manner, the Restructuring or the consummation of the Restructuring that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by the Debtors of written notice of such breach;

 

(g)the occurrence of a “Default” or an “Event of Default” under the Indenture, other than (i) any that exist as of the RSA Effective Date or (ii) as a result of the commencement of the Chapter 11 Cases or the undertaking of any Debtor hereunder to implement the Restructuring through the Chapter 11 Cases;

 

(h)any Debtor terminates its obligations under and in accordance with this Agreement;

 

(i)the Debtors file, propose or otherwise support any plan of liquidation, asset sale of all or substantially all of the Debtors’ assets or plan of reorganization other than as contemplated herein;

 

(j)an order is entered by the Bankruptcy Court granting relief from the automatic stay imposed by Bankruptcy Code section 362 authorizing any party to proceed against any material asset of any of the Debtors or that would materially and adversely affect the Debtors’ ability to operate its businesses in the ordinary course;

 

(k)a failure by the Debtors to pay the fees and expenses of the Consenting Noteholder Advisors consistent with Section 6(c) of this Agreement;

 

(l)other than with respect to the Chapter 11 Cases, the entry of an order by any court of competent jurisdiction granting the relief sought in an involuntary proceeding against any entity constituting the Debtors seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of any entity constituting the Debtors or the Debtors’ debts, or of a substantial part of the Debtors’ assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect (provided that such involuntary proceeding is not dismissed within a period of 30 days after the filing thereof);

 

 14 

 

(m)if any of the Debtors (i) voluntarily commences any case or files any petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, administrative receivership or similar law now or hereafter in effect, except as provided for in this Agreement, (ii) consents to the institution of, or fails to contest in a timely and appropriate manner, any involuntary proceeding or petition other than with respect to the Chapter 11 Cases as described above, (iii) applies for or consents to the appointment of a receiver, administrator, administrative receiver, trustee, custodian, sequestrator, conservator or similar official for the Debtors or for a substantial part of the Debtors’ assets, (iv) files an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) makes a general assignment or arrangement for the benefit of creditors or (vi) takes any corporate action for the purpose of authorizing any of the foregoing;

 

(n)a material breach by any EnerVest Party of any representation, warranty, or covenant of such EnerVest Party set forth in this Agreement that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by the EnerVest Party of written notice of such breach;

 

(o)the occurrence of an EnerVest Termination Date; or

 

(p)the occurrence of any other material breach of this Agreement not otherwise covered in this list by any Debtor that has not been cured (if susceptible to cure) within five (5) business days after written notice to the Debtors of such breach.

 

10.         Consenting RBL Lender Termination Events. Required Consenting RBL Lenders shall have the right, but not the obligation, upon written notice to the other Parties, to terminate the obligations of the Consenting RBL Lenders under this Agreement upon the occurrence of any of the following events, unless waived, in writing, by Required Consenting RBL Lenders on a prospective or retroactive basis (each, an “RBL Termination Event”):

 

(a)the failure to meet any of the Milestones in Section 4 unless (i) such failure is the result of any act, omission, or delay on the part of any of the Required Consenting RBL Lender seeking termination in violation of its obligations under this Agreement or (ii) such Milestone is extended in accordance with Section 4;

 

(b)if the Bankruptcy Court enters an order (i) dismissing any of the Chapter 11 Cases, (ii) converting any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code other than as contemplated by the Restructuring, (iii) appointing a trustee or an examiner with expanded powers pursuant to Bankruptcy Code section 1104 in any of the Chapter 11 Cases, (iv) terminating the Debtors’ exclusive right to file a plan or plans of reorganization pursuant to Bankruptcy Code section 1121, or (v) making a finding of fraud, dishonesty or misconduct by any executive, officer or director of the Debtors, regarding or relating to the Debtors, without the consent of the Required Consenting RBL Lenders;

 

 15 

 

(c)the Debtors file, without the prior written consent of the Required Consenting RBL Lenders, any motion or any request for relief seeking to (i) dismiss any of the Chapter 11 Cases, (ii) convert any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, or (iii) appoint a trustee or examiner pursuant to Bankruptcy Code section 1104 in any of the Chapter 11 Cases;

 

(d)upon the Debtors’ withdrawal, waiver, amendment or modification, or the filing of (or announced intention to file) a pleading seeking to withdraw, waive, amend or modify any of the Restructuring Documents identified in Sections 3(a)–(f) herein or Sections (k) and (l) herein (to the extent such Restructuring Documents identified in (k) or (l) have a material impact on the RBL Lenders) in a manner not reasonably acceptable in form and substance to the Required Consenting RBL Lenders; provided that, notwithstanding anything to the contrary in this Agreement, each Consenting RBL Lender may terminate this Agreement as to itself under this clause (d) if any of the foregoing Restructuring Documents, or this Agreement, the RBL Term Sheet or Restructuring Term Sheet, are amended or modified without the consent of such Consenting RBL Lender and such amendment or modification (x) adversely affects such Consenting RBL Lender’s treatment as contemplated in the Restructuring Term Sheet or the RBL Term Sheet, each as in effect on the RSA Effective Date, or (y) changes in an adverse manner the pro forma capital structure of the Reorganized Debtors as set forth in the Restructuring Term Sheet as in effect on the RSA Effective Date (other than as permitted by the RBL Term Sheet as in effect on the RSA Effective Date);

 

(e)the issuance by any governmental authority, including the Bankruptcy Court, any regulatory authority, or any other court of competent jurisdiction, of any ruling or order enjoining or otherwise making impractical the substantial consummation of the Restructuring on the terms and conditions set forth in the Restructuring Term Sheet, the RBL Term Sheet, or the Pre-Packaged Plan; provided that the Debtors shall have ten (10) business days after issuance of such ruling or order to obtain relief that would allow consummation of the Restructuring in a manner that (i) does not prevent or diminish in a material way compliance with the terms of this Agreement and the Pre-Packaged Plan, and (ii) is acceptable to the Required Consenting RBL Lenders;

 

(f)a material breach by any Debtor of any representation, warranty, or covenant of such Debtor set forth in this Agreement that could reasonably be expected to delay, prevent, or hinder, other than in a de minimis manner, the Restructuring or the consummation of the Restructuring that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by the Debtors of written notice of such breach;

 

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(g)the occurrence of a “Default” or an “Event of Default” under the Credit Agreement, other than (i) any that exist as of the RSA Effective Date or (ii) as a result of the commencement of the Chapter 11 Cases or the undertaking of any Debtor hereunder to implement the Restructuring through the Chapter 11 Cases;

 

(h)any Debtor terminates its obligations under and in accordance with this Agreement;

 

(i)the Debtors file, propose or otherwise support any plan of liquidation, asset sale of all or substantially all of the Debtors’ assets or plan of reorganization other than as contemplated herein; provided that, notwithstanding anything to the contrary in this Agreement, each Consenting RBL Lender may terminate this Agreement as to itself under this clause (i) if such plan or asset sale (x) adversely affects such Consenting RBL Lender’s treatment as contemplated in the Restructuring Term Sheet or the RBL Term Sheet, each as in effect on the RSA Effective Date, or (y) changes in an adverse manner the pro forma capital structure of the Reorganized Debtors as set forth in the Restructuring Term Sheet as in effect on the RSA Effective Date (other than as permitted by the RBL Term Sheet as in effect on the RSA Effective Date);

 

(j)an order is entered by the Bankruptcy Court granting relief from the automatic stay imposed by Bankruptcy Code section 362 authorizing any party to proceed against any material asset of any of the Debtors or that would materially and adversely affect the Debtors’ ability to operate its businesses in the ordinary course;

 

(k)a failure by the Debtors to pay the fees and expenses of the RBL Agent Advisors consistent with Section 7(c) of this Agreement;

 

(l)other than with respect to the Chapter 11 Cases, the entry of an order by any court of competent jurisdiction granting the relief sought in an involuntary proceeding against any entity constituting the Debtors seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of any entity constituting the Debtors or the Debtors’ debts, or of a substantial part of the Debtors’ assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect (provided that such involuntary proceeding is not dismissed within a period of 30 days after the filing thereof);

 

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(m)if any of the Debtors (i) voluntarily commences any case or files any petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, administrative receivership or similar law now or hereafter in effect, except as provided for in this Agreement, (ii) consents to the institution of, or fails to contest in a timely and appropriate manner, any involuntary proceeding or petition other than with respect to the Chapter 11 Cases as described above, (iii) applies for or consents to the appointment of a receiver, administrator, administrative receiver, trustee, custodian, sequestrator, conservator or similar official for the Debtors or for a substantial part of the Debtors’ assets, (iv) files an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) makes a general assignment or arrangement for the benefit of creditors or (vi) takes any corporate action for the purpose of authorizing any of the foregoing;

 

(n)a material breach by any EnerVest Party of any representation, warranty, or covenant of such EnerVest Party set forth in this Agreement that (to the extent curable) remains uncured for a period of five (5) business days after the receipt of the EnerVest Party of written notice of such breach;

 

(o)the occurrence of an EnerVest Termination Date;

 

(p)the occurrence of any other material breach of this Agreement not otherwise covered in this list by any Debtor that has not been cured (if susceptible to cure) within five (5) business days after written notice to the Debtors of such breach; or

 

(q)either of the Cash Collateral Orders is reversed, stayed, vacated or modified without the consent of the Required Consenting RBL Lenders or the consensual use of cash collateral thereunder is terminated.

 

11.         The Debtors’ Termination Events. Each Debtor may, upon written notice to the Consenting Noteholders, the Consenting RBL Lenders, and the EnerVest Parties, terminate its obligations under this Agreement upon the occurrence of any of the following events (each a “Debtor Termination Event”), unless waived, in writing, on a prospective or retroactive basis:

 

(a)a material breach by one or more Consenting Noteholders of any representation, warranty, or covenant set forth in this Agreement that could reasonably be expected to have a material adverse impact on the Restructuring or the consummation of the Restructuring that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such Consenting Noteholders of notice and description of such breach; provided that the foregoing shall not be a Debtor Termination Event if non-breaching Consenting Noteholders hold, in the aggregate, at least 66.667% in principal amount outstanding of the Notes Claims;

 

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(b)a material breach by one or more Consenting RBL Lenders of any representation, warranty, or covenant set forth in this Agreement that could reasonably be expected to have a material adverse impact on the Restructuring or the consummation of the Restructuring that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such Consenting RBL Lenders of notice and description of such breach; provided that the foregoing shall not be a Debtor Termination Event if non-breaching Consenting RBL Lenders hold, in the aggregate, at least 66.667% in principal amount outstanding of the RBL Claims;

 

(c)upon notice to the Consenting Noteholders and the Consenting RBL Lenders, if the board of directors or board of managers, as applicable, of a Debtor determines in good faith, after receiving advice from counsel, that proceeding with the Restructuring (including, without limitation, the Pre-Packaged Plan or solicitation of the Pre-Packaged Plan) would be inconsistent with the exercise of its fiduciary duties; or

 

(d)the issuance by any governmental authority, including the Bankruptcy Court, any regulatory authority, or any other court of competent jurisdiction, of any ruling or order enjoining the substantial consummation of the Restructuring; provided that the Debtors have made commercially reasonable, good faith efforts to cure, vacate, or have overruled such ruling or order prior to terminating this Agreement

 

12.         EnerVest Parties Termination Event. Each EnerVest Party may, upon written notice to the Debtors, the Consenting Noteholders, and the Consenting RBL Lenders, terminate its obligations under this Agreement upon the occurrence of (a) a material breach by Consenting Noteholders constituting a majority of the total Notes Claims held by the Consenting Noteholders or (b) a material breach by Consenting RBL Lenders constituting a majority of the total RBL Claims held by the Consenting RBL Lenders, of any representation, warranty, or covenant set forth in this Agreement that could reasonably be expected to have a material adverse impact on the Restructuring or the consummation of the Restructuring that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such Consenting Noteholders of notice and description of such breach.

 

13.         Mutual Termination; Automatic Termination. This Agreement and the obligations of all Parties hereunder may be terminated by mutual written agreement by and among EVEP, on behalf of itself and each other Debtor, the EnerVest Parties, the Required Consenting RBL Lenders, and the Required Consenting Noteholders. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate automatically upon the occurrence of the Effective Date.

 

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14.Effect of Termination.

 

(a)The earliest date on which termination of this Agreement as to a Party is effective in accordance with Section 9, 10, 11, or 13 of this Agreement shall be referred to, with respect to such Party, as an “RSA Termination Date.” Upon the occurrence of an RSA Termination Date, all Parties’ obligations under this Agreement (except any obligations that survive termination pursuant to Section 19) shall be terminated effective immediately, and all such Parties hereto shall be released from all commitments, undertakings, and agreements hereunder, and any vote in favor of the Pre-Packaged Plan delivered by such Parties shall be immediately revoked and deemed void ab initio; provided any claim for breach of this Agreement that occurs prior to such RSA Termination Date shall survive such termination, and all rights and remedies with respect to such claims shall not be prejudiced in any way; provided further, that a termination of this Agreement by one or more Consenting RBL Lenders pursuant to the provisos of clauses (d) or (i) of Section 10 shall not terminate this Agreement as to all other non-terminating Parties. For the avoidance of doubt, the automatic stay arising pursuant to Bankruptcy Code section 362 shall be deemed waived or modified for purposes of providing notice or exercising rights hereunder.

 

(b)The date on which termination of this Agreement as to an EnerVest Party is effective in accordance with Section 12 of this Agreement shall be referred to, with respect to such Party, as an “EnerVest Termination Date.” Except as otherwise provided herein, upon the occurrence of an EnerVest Termination Date, the obligations of only the EnerVest Party that exercised its termination right in accordance with Section 12 shall be terminated effectively immediately (except any obligations that survive termination pursuant to Section 19), and only such Party hereto shall be released from all commitments, undertakings, and agreements hereunder, and, if applicable, any vote in favor of the Pre-Packaged Plan delivered by such Party shall be immediately revoked and deemed void ab initio; provided that any claim for breach of this Agreement that occurs prior to such EnerVest Termination Date shall survive termination, and all rights and remedies with respect to such claims shall not be prejudiced in any way.

 

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15.Transfers of Claims and Interests.

 

(a)During the period beginning on the RSA Effective Date and ending on the RSA Termination Date, each Consenting Noteholder, each Consenting RBL Lender, and each EnerVest Party agrees not to (i) sell, transfer, hypothecate, assign, pledge, grant a participation interest in, or otherwise dispose of, directly or indirectly, its right, title, or interest in respect of any of such Consenting Noteholder’s, the Consenting RBL Lender’s, or EnerVest Party’s claims against, or interests in, any Debtor, as applicable, in whole or in part, or (ii) deposit any of such Consenting Noteholder’s, Consenting RBL Lender’s, or EnerVest Party’s claims against or interests in any Debtor, as applicable, into a voting trust, or grant any proxies, or enter into a voting agreement with respect to any such claims or interests (the actions described in clauses (i) and (ii) are collectively referred to herein as a “Transfer” and the Consenting Noteholder, the Consenting RBL Lender, or EnerVest Party making such Transfer is referred to herein as the “Transferor”), unless such Transfer is to (x) another Consenting Noteholder, Consenting RBL Lender, or EnerVest Party, (y) solely with respect to any Consenting Noteholder (other than JPMorgan Chase Bank, N.A. and any of its affiliates to the extent they become Consenting Noteholders hereunder), a transferee that as of the date of such Transfer, the Transferor controls, is controlled by or is under common control with such Transferor, or an affiliate, affiliated fund or affiliated entity with a common investment advisor, provided that such transferee under this clause (y) shall be deemed to be bound by the terms of this Agreement without any further action on the part of such transferee or Transferor other than that notice of any such Transfer shall be provided to EVEP, counsel to the Consenting Noteholders, counsel to the Consenting RBL Lenders, and counsel to the EnerVest Parties or (z) any other entity (including, for the avoidance of doubt, an entity controlled by or under common control with, and any affiliate, affiliated fund or affiliated entity of, a Consenting RBL Lender) that first agrees in writing to be bound by the terms of this Agreement by executing and delivering to EVEP, counsel to the Consenting Noteholders, counsel to the RBL Agent, and counsel to the EnerVest Parties, a Transferee Joinder substantially in the form attached hereto as Exhibit C (the “Transferee Joinder”) no later than 2 business days prior to the consummation of such Transfer. With respect to claims against or interests in a Debtor held by the relevant transferee upon consummation of a Transfer in accordance herewith, such transferee is deemed to make all of the representations, warranties, and covenants of a Consenting Noteholder, Consenting RBL Lender, or EnerVest Party, as applicable, set forth in this Agreement. Upon compliance with the foregoing, the Transferor shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Agreement that occurs prior to such Transfer) under this Agreement to the extent of such transferred rights and obligations. Any Transfer made in violation of this Sub-Clause (a) of this Section 15 shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to the Debtors, any Consenting Noteholder, and Consenting RBL Lender, and/or any EnerVest Party, and shall not create any obligation or liability of any Debtor, any other Consenting Noteholder, Consenting RBL Lender, or any EnerVest Party to the purported transferee.

 

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(b)Notwithstanding Sub-Clause (a) of this Section 15, (i) an entity that is acting in its capacity as a Qualified Marketmaker (as defined below) shall not be required to be or become a Consenting Noteholder or Consenting RBL Lender, or otherwise bound to this Agreement, in order to effect any Transfer (by purchase, sale, assignment, participation, or otherwise) of any claim against, or interest in, any Debtor, as applicable, by a Consenting Noteholder, Consenting RBL Lender or EnerVest Party to a transferee; provided that the transferee of the Qualified Marketmaker of such claims against, or interest in, any Debtor shall satisfy clauses (x), (y) or (z) of Sub-Clause (a) of this Section 15; and (ii) to the extent that a Consenting Noteholder, or Consenting RBL Lender, acting in its capacity as a Qualified Marketmaker, acquires any claim against, or interest in, any Debtor from a holder of such claim or interest who is not a Consenting Noteholder, Consenting RBL Lender or an EnerVest Party, it may Transfer (by purchase, sale, assignment, participation, or otherwise) such claim or interest without the requirement that the transferee be or become a Consenting Noteholder or Consenting RBL Lender in accordance with this Section 15. For purposes of this Sub-Clause (b), a “Qualified Marketmaker” means an entity that (x) holds itself out to the market as standing ready in the ordinary course of its business to purchase from customers and sell to customers claims against, or interests in, the Debtors (including debt securities or other debt) or enter with customers into long and short positions in claims against, or interests in, the Debtors (including debt securities or other debt), in its capacity as a dealer or market maker in such claims against, or interests in, the Debtors, and (y) is in fact regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).

 

16.         Further Acquisition of Claims or Interests. Except as set forth in Section 15, nothing in this Agreement shall be construed as precluding any Consenting Noteholder, any Consenting RBL Lender, or any EnerVest Party or any of their respective affiliates from acquiring additional Notes Claims, RBL Claims, Existing Equity Interests (as defined in the Restructuring Term Sheet), or interests in the instruments underlying the Notes Claims, RBL Claims, or Existing Equity Interests; provided that, subject to the last paragraph of Section 6 and Section 15(b), any additional Notes Claims, RBL Claims, Existing Equity Interests, or interests in the underlying instruments acquired by any Consenting Noteholder or Consenting RBL Lender and with respect to which such Consenting Noteholder or Consenting RBL Lender is the legal owner, beneficial owner, and/or investment advisor or manager of or with power and/or authority to bind any claims or interests held by it shall automatically be subject to the terms and conditions of this Agreement. Upon any such further acquisition, such Consenting Noteholder or Consenting RBL Lender shall promptly notify EVEP, counsel to the Consenting Noteholders, and counsel to the RBL Agent.

 

17.         Acknowledgments. Each Party irrevocably acknowledges and agrees that this Agreement is not and shall not be deemed to be a solicitation for consents to the Pre-Packaged Plan. The acceptance of the Pre-Packaged Plan by each of the Consenting Noteholders and Consenting RBL Lenders will not be solicited until such Parties have received the Disclosure Statement and related ballots in accordance with applicable law, and will be subject to Bankruptcy Code sections 1125, 1126 and 1127.

 

18.         Representations and Warranties.

 

(a)Each Consenting Noteholder and Consenting RBL Lender hereby represents and warrants to the Debtors and not any other Party, on a several (and not joint and several) basis, for itself and not any other person or entity that the following statements are true, correct, and complete as of the date hereof:

 

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(i)it has the requisite organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

(ii)the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)the execution, delivery and performance by it of this Agreement does not violate any provision of law, rule, or regulation applicable to it, or its certificate of incorporation, or bylaws, or other organizational documents;

 

(iv)it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), with sufficient knowledge and experience to evaluate properly the terms and conditions of this Agreement and to consult with its legal and financial advisors with respect to its investment decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement;

 

(v)it (A) either (1) is the sole legal owner, beneficial owner, and/or investment advisor or manager of or with power and/or authority to bind the claims and interests identified below its name on its signature page hereof and in the amounts set forth therein, or (2) has all necessary investment or voting discretion with respect to the principal amount of claims and interests identified below its name on its signature page hereof, and has the power and authority to bind the owner(s) of such claims and interests to the terms of this Agreement and (B) subject to the last paragraph of Section 6, does not directly own any Notes Claims, RBL Claims, or Existing Equity Interests, other than as identified below its name on its signature page hereof; and

 

(vi)to the best of its knowledge (without requiring any diligence or further investigation), it has no agreement, understanding, or other arrangement (whether oral, written, or otherwise) with any other Consenting Noteholder or Consenting RBL Lender regarding the transfer or sale of all or a material portion of the Debtors’ assets to any party whatsoever.

 

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(b)Each Debtor hereby represents and warrants on a joint and several basis (and not any other person or entity other than the Debtors) that the following statements are true, correct, and complete as of the date hereof:

 

(i)it has the requisite corporate or other organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

(ii)the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part, including approval of each of the independent director(s) or manager(s), as applicable, of each of the corporate entities that comprise the Debtors;

 

(iii)the execution and delivery by it of this Agreement does not (A) violate its certificates of incorporation, or bylaws, or other organizational documents, or those of any of its affiliates, or (B) result in a breach of, or constitute (with due notice or lapse of time or both) a default (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or any Debtor’s undertaking to implement the Restructuring through the Chapter 11 Cases) under any material contractual obligation to which it or any of its affiliates is a party;

 

(iv)the execution and delivery by it of this Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, other than, for the avoidance of doubt, the actions with governmental authorities or regulatory bodies required in connection with implementation of the Restructuring ;

 

(v)(A) the offer and sale of the New Equity Interests has not been, and will not be, registered under the Securities Act and (B) the offering and issuance of the New Equity Interests is intended to be exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D thereunder or pursuant to Bankruptcy Code section 1145;

 

(vi)subject to the provisions of Bankruptcy Code sections 1125 and 1126 and, to the extent applicable, approval by the Bankruptcy Court, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors’ rights generally, or by equitable principles relating to enforceability;

 

 24 

 

(vii)it has sufficient knowledge and experience to evaluate properly the terms and conditions of the Pre-Packaged Plan and this Agreement, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction; and

 

(viii)all entities owned and controlled by EnerVest that directly hold Existing Equity Interests are party to this Agreement.

 

(c)Each EnerVest Party hereby represents and warrants on a several (and not joint and several) basis (for itself and not for any other person or entity) that the following statements are true, correct, and complete as of the date hereof:

 

(i)it has the requisite corporate or other organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

(ii)the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)the execution, delivery and performance by it of this Agreement does not violate any provision of law, rule, or regulation applicable to it, or its certificate of incorporation, or bylaws, or other organizational documents;

 

(iv)it has sufficient knowledge and experience to evaluate properly the terms and conditions of the Pre-Packaged Plan and this Agreement, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction; and

 

(v)all entities owned and controlled by EnerVest that directly hold Existing Equity Interests are party to this Agreement.

 

19.         Survival of Agreement. Each of the Parties acknowledges and agrees that this Agreement is being executed in connection with negotiations concerning a possible financial restructuring of the Debtors and in contemplation of possible chapter 11 filings by the Debtors and the rights granted in this Agreement are enforceable by each signatory hereto without approval of any court, including the Bankruptcy Court. Further, notwithstanding the termination of the Agreement in accordance with its terms, the agreements and obligations of the Parties set forth in Sections 7(c) (with respect to the Debtors’ obligations accrued up to an including the RSA Termination Date), 14, 17, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 30(b), 31, 32, 33 and 34 shall survive such termination and shall continue in full force and effect for the benefit of the Parties in accordance with the terms hereof.

 

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20.         Settlement Discussions. The Parties acknowledge that this Agreement, the Pre-Packaged Plan, and all negotiations relating hereto are part of a proposed settlement of matters that could otherwise be the subject of litigation. Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state rules of evidence and any other applicable law, foreign or domestic, the Restructuring Term Sheet, the RBL Term Sheet, this Agreement, the Pre-Packaged Plan, any related documents, and all negotiations relating thereto shall not be admissible into evidence in any proceeding, or used by any party for any reason whatsoever, including in any proceeding, other than a proceeding to enforce its terms.

 

21.         Relationship Among Parties. Notwithstanding anything herein to the contrary:

 

(a)the duties and obligations of the Consenting Noteholders under this Agreement shall be several, not joint and several. None of the Consenting Noteholders shall have any fiduciary duty, any duty of trust or confidence in any form, or other duties or responsibilities to each other, any other Noteholder, any RBL Lender, the Debtors, or any of the Debtors’ creditors or other stakeholders, and there are no commitments among or between the Consenting Noteholders. It is understood and agreed that any Consenting Noteholder may trade in any debt or equity securities of the Debtors without the consent of the Debtors or any other Consenting Noteholder, subject to applicable securities laws and Sections 15 and 16 of this Agreement. No Party shall have any responsibility by virtue of this Agreement for any trading by any other entity. No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Agreement; and

 

(b)the duties and obligations of the Consenting RBL Lenders under this Agreement shall be several, not joint and several. None of the Consenting RBL Lenders shall have any fiduciary duty, any duty of trust or confidence in any form, or other duties or responsibilities to each other, any other RBL Lender, any Noteholder, the Debtors, or any of the Debtors’ creditors or other stakeholders, and there are no commitments among or between the Consenting RBL Lenders. It is understood and agreed that any Consenting RBL Lender may trade in any debt or equity securities of the Debtors without the consent of the Debtors or any other Consenting RBL Lender, subject to applicable securities laws and Sections 15 and 16 of this Agreement. No Party shall have any responsibility by virtue of this Agreement for any trading by any other entity. No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Agreement.

 

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22.         Specific Performance. It is understood and agreed by the Parties that money damages may be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy of any such breach of this Agreement, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.

 

23.         Governing Law & Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to such state’s choice of law provisions which would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each Party irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any matter arising under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit, or proceeding, may be brought in state or federal court of competent jurisdiction in New York County, State of New York, and by executing and delivering this Agreement, each of the Parties irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Notwithstanding the foregoing consent to New York jurisdiction, if the Chapter 11 Cases are commenced, each Party agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. By executing and delivering this Agreement, and upon commencement of the Chapter 11 Cases, each of the Parties irrevocably and unconditionally submits to the personal jurisdiction of the Bankruptcy Court solely for purposes of any action, suit, proceeding, or other contested matter arising out of or relating to this Agreement, or for recognition or enforcement of any judgment rendered or order entered in any such action, suit, proceeding, or other contested matter.

 

24.         Waiver of Right to Trial by Jury. Each of the Parties waives any right to have a jury participate in resolving any dispute, whether sounding in contract, tort or otherwise, between any of the Parties arising out of, connected with, relating to, or incidental to the relationship established between any of them in connection with this Agreement. Instead, any disputes resolved in court shall be resolved in a bench trial without a jury.

 

25.         Successors and Assigns. Except as otherwise provided in this Agreement, this Agreement is intended to bind and inure to the benefit of each of the Parties and each of their respective permitted successors, assigns, heirs, executors, administrators, and representatives.

 

26.         No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other person or entity shall be a third-party beneficiary of this Agreement.

 

27.         Notices. All notices (including, without limitation, any notice of termination or breach) and other communications from any Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, email, or facsimile to the other Parties at the applicable addresses below, or such other addresses as may be furnished hereafter by notice in writing. Any notice of termination or breach shall be delivered to all other Parties.

 

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(a)If to any Debtor:

 

EV Energy Partners, L.P.

Attn: Nicholas Bobrowski

1001 Fannin, Suite 800

Houston, TX 77002

Tel:      (713) 495-6593

Fax:      (713) 651-1260

Email:   nbobrowski@evenergypartners.com

 

With a copy to:

 

Kirkland & Ellis LLP

Attn:    Joshua A. Sussberg, P.C., Jeremy David Evans

601 Lexington Ave.

New York, NY 10022-4611

Tel:      (212) 446-4733

Fax:     (312) 446-4900

Email:   jsussberg@kirkland.com
      jeremy.evans@kirkland.com

 

Kirkland & Ellis LLP

Attn:     Brad Weiland, Travis M. Bayer

300 N. LaSalle, Suite 2400

Chicago, IL 60654

Tel:      (312) 862-2000

Fax:      (312) 862-2200

Email:   bweiland@kikland.com

      travis.bayer@kirkland.com

 

(b)If to any EnerVest Party:

 

EnerVest, Ltd.

Attn.: J. Andrew West

1001 Fannin, Ste. 800

Houston, TX 77002

Tel: (713) 970-1924

Fax: (713) 615-7718

Email: awest@enervest.net

 

(c)If to the Consenting Noteholders:

 

Akin Gump Strauss Hauer & Feld LLP

Attn:     Philip Dublin, Jason Rubin

Bank of America Tower

One Bryant Park

New York, NY 10036-6745

Tel: (212) 872-1000

Fax: (212) 872-1002

Email: pdublin@akingump.com

    jrubin@akingump.com

 

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(d)If to the Consenting RBL Lenders:

 

Simpson Thacher & Bartlett LLP

Attn:      Elisha Graff, Nicholas Baker

425 Lexington Avenue

New York, NY 10017

Tel: (212) 455-2000

Fax: (212) 455-2502

Email: egraff@stblaw.com

     nbaker@stblaw.com

 

28.         Entire Agreement. This Agreement (including the Exhibits and Schedules) constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersedes all prior negotiations, agreements, and understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement.

 

29.         Amendments. Except as otherwise provided herein, this Agreement may not be modified, amended, or supplemented without the prior written consent of the Debtors, the Required Consenting Noteholders, and the Required Consenting RBL Lenders; provided that any modification, amendment or supplement that adversely impacts the treatment or rights of any Consenting Noteholder or Consenting RBL Lender, as applicable, differently than any other Consenting Noteholder or Consenting RBL Lender shall require the consent of such adversely impacted Consenting Noteholder or Consenting RBL Lender, as applicable, in order for such modification, amendment or supplement to be effective; provided, further, that any modification, amendment or supplement that directly and adversely impacts the rights of any EnerVest Party shall require the consent of such adversely impacted EnerVest Party in order for such modification, amendment, or supplement to be effective.

 

30.         Reservation of Rights.

 

(a)Except as expressly provided in this Agreement, the Restructuring Term Sheet, or the RBL Term Sheet, including Section 5(a) of this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict the ability of any Party to protect and preserve its rights, remedies and interests, including without limitation, its claims against any of the other Parties.

 

(b)Without limiting Sub-Clause (a) of this Section 30 in any way, if the Pre-Packaged Plan is not consummated in the manner set forth, and on the timeline set forth, in this Agreement, the RBL Term Sheet, and Restructuring Term Sheet, or if this Agreement is terminated for any reason, nothing shall be construed herein as a waiver by any Party of any or all of such Party’s rights, remedies, claims, and defenses and the Parties expressly reserve any and all of their respective rights, remedies, claims and defenses. The Restructuring Term Sheet, the RBL Term Sheet, this Agreement, the Pre-Packaged Plan, and any related document shall in no event be construed as or be deemed to be evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever. Each of the Parties denies any and all wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert.

 

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31.         Counterparts. This Agreement may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument, and the counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf).

 

32.         Public Disclosure. This Agreement, as well as its terms, its existence, and the existence of the negotiation of its terms are expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof, and the Debtors shall not use the name of any Consenting Noteholder or Consenting RBL Lender, or the holdings information for any Consenting Noteholder or any Consenting RBL Lender, in any press release without such Consenting Noteholder’s or Consenting RBL Lender’s prior written consent; provided that, after the RSA Effective Date, the Parties may disclose the existence of, or the terms of, this Agreement or any other material term of the transaction contemplated herein without the express written consent of the other Parties but may not disclose, and shall redact, the holdings information of every Party to this Agreement as of the date hereof and at any time hereafter. In addition, no Party to this Agreement may disclose the holdings information of any Party to this Agreement to any person except as may be compelled by a court of competent jurisdiction, except that the Debtors shall be permitted to disclose the aggregate principal amount, and aggregate percentage of, the holdings information held by the Parties collectively. The Debtors take no position with regard to whether such information may be material non-public information, but may not disclose such information other than on a confidential basis or as may be ordered by the Bankruptcy Court.

 

33.         Headings. The section headings of this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement.

 

34.         Interpretation. This Agreement is the product of negotiations among the Parties, and the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement or any portion hereof, shall not be effective in regard to the interpretation hereof. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. Any reference to “business day” means any day, other than a Saturday, a Sunday or any other day on which banks located in New York, New York are closed for business as a result of federal, state or local holiday and any other reference to day means a calendar day.

 

[Signatures and exhibits follow]

 

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  DEBTORS:
   
  EV ENERGY PARTNERS, L.P.
  By: EV Energy GP, L.P.,
    its general partner
  By: EV Management, L.L.C.,
    its general partner
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  EV ENERGY FINANCE CORP.
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  EV PROPERTIES GP, LLC
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  ENERVEST PRODUCTION PARTNERS, LTD.
  By: EVPP GP, LLC,
    its general partner
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  CGAS PROPERTIES, L.P.
  By: EVCG GP, LLC,
    its general partner
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  EVPP GP, LLC
  EVCG GP, LLC
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  ENERVEST MONROE MARKETING, LTD.
  ENERVEST MONROE GATHERING, LTD.
  By: EVPP GP, LLC,
    its general partner
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  EV PROPERTIES, L.P.
  By: EV Properties GP, LLC,
    its general partner
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  EV ENERGY GP, L.P.
  By: EV Management, L.L.C.,
    its general partner
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

  EV MANAGEMENT, L.L.C.
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  ENERVEST MESA, LLC
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer
     
  BLAKE & BELDEN, LLC
     
  By: /s/ Nicholas Bobrowski
  Name: Nicholas Bobrowski
  Title: Vice President and Chief Financial Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  FINEPOINT CAPITAL PARTNERS I, LP
     
  By: /s/ Stacy Vezina
  Name: Stacy Vezina
  Title: General Counsel/CCO

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  CONSENTING NOTEHOLDER
   
  FINEPOINT CAPITAL PARTNERS II, LP
     
  By: /s/ Stacy Vezina
  Name: Stacy Vezina
  Title: General Counsel/CCO

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  CONSENTING NOTEHOLDER
   
  FSEP Term Funding LLC
  By: FS Energy and Power Fund, as its Sole Member
  By: FS Investment Advisor, LLC, its Investment Adviser
     
  By: /s/ Sean Coleman
  Name: Sean Coleman
  Title: Chief Credit Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  CONSENTING NOTEHOLDER
   
  Berwyn Funding LLC
  By: FS Energy and Power Fund, as its Sole Member
  By: FS Investment Advisor, LLC, its Investment Adviser
     
  By: /s/ Sean Coleman
  Name: Sean Coleman
  Title: Chief Credit Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  CONSENTING NOTEHOLDER
   
  Race Street Funding LLC
  By: FS Investment Corporation, as its Sole Member
  By: FB Income Advisor, LLC, its Investment Adviser
     
  By: /s/ Sean Coleman
  Name: Sean Coleman
  Title: Chief Credit Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  CONSENTING NOTEHOLDER
   
  Cobbs Creek LLC
  By: FS Investment Corporation II, as its Sole Member
  By: FSIC II Advisor, LLC, its Investment Adviser
     
  By: /s/ Sean Coleman
  Name: Sean Coleman
  Title: Chief Credit Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  FS Investment Corporation III
  By: FSIC III Advisor, LLC, its Investment Adviser
     
  By: /s/ Sean Coleman
  Name: Sean Coleman
  Title: Chief Credit Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  BIWA FUND LIMITED
     
  By: /s/ Sarah Higgins
  Name: Sarah Higgins
  Title: Authorised Signatory

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  GRACECHURCH OPPORTUNITIES FUND LIMITED
     
  By: /s/ Sarah Higgins
  Name: Sarah Higgins
  Title: Authorised Signatory

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  CQS DIRECTIONAL OPPORTUNITIES MASTER FUND LIMITED
     
  By: /s/ Sarah Higgins
  Name: Sarah Higgins
  Title: Authorised Signatory

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  CQS AIGUILLE DU CHARDONNET MF S.C.A.
  SICAV-SIF
     
  By: /s/ Sarah Higgins
  Name: Sarah Higgins
  Title: Authorised Signatory

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Phoenix Investment Adviser LLC as Investment Manager to JLP Credit Opportunity Master Fund Ltd.
     
  By: /s/ Lance Friedler
  Name: Lance Friedler
  Title: General Counsel

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Phoenix Investment Adviser LLC as Subinvestment Manager to Mercer QIF Fund PLC Mercer Investment Fund I
     
  By: /s/ Lance Friedler
  Name: Lance Friedler
  Title: General Counsel

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Phoenix Investment Adviser LLC, as Investment Subadviser to JLP Credit Opportunity IDF Series Interests of the Sali Multi-Series Fund LP
     
  By: /s/ Lance Friedler
  Name: Lance Friedler
  Title: General Counsel

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  CROSS OCEAN USSS FUND I (A) LP,
  as a Noteholder

 

  By: CROSS OCEAN PARTNERS MANAGEMENT LP
    its investment manager
     
  By: /s/ Nick Renwick
  Name: Nick Renwick
  Title: Authorized Signatory

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  CROSS OCEAN USSS SIF I LP,
  as a Noteholder
     
  By: CROSS OCEAN PARTNERS MANAGEMENT LP
    its investment manager
     
  By: /s/ Nick Renwick
  Name: Nick Renwick
  Title: Authorized Signatory

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Marret High Yield Hedge LP
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Marret High Yield Fund
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Marret Resource Corp.
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Ontario Pension Board - Distressed Debt Mandate
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Marret High Yield Bond Fund
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  CI income Fund - HH
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Greystone High Yield Fund
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Shell Canada 2007 Pension Plan
     
  By: /s/ Charles LeBlanc
  Name: Charles LeBlanc
  Title: Analyst

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Concise Short Term High Yield Master Fund, SPC
     
  By: /s/ Tom Krasner
  Name: Tom Krasner
  Title: Principal

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  The Saratoga Advantage Trust – James Alpha High
  Income Portfolio – Concise Capital
   
  By: /s/ Tom Krasner
  Name: Tom Krasner
  Title: Principal

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Mercer QIF Fund PLC – Mercer Investment Fund I
     
  By: /s/ Tom Krasner
  Name: Tom Krasner
  Title: Principal

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Inversiones Rojo Rio SA
     
  By: /s/ Tom Krasner
  Name: Tom Krasner
  Title: Principal

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CONSENTING NOTEHOLDER
   
  Concise Short Term High Yield Fund
     
  By: /s/ Tom Krasner
  Name: Tom Krasner
  Title: Principal

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  JPMORGAN CHASE BANK, N.A. (“JPMC”), solely in respect of its Commercial Banking Corporate Client Banking & Specialized Industries unit (“CCBSI”) and not any other unit, group, division or affiliate of JPMC and solely in respect of CCBSI’s RBL Claims.  For the avoidance of doubt, and notwithstanding anything to the contrary contained in this Agreement, this Agreement shall not apply to JPMC (other than with respect to Claims arising from the RBL Claims held by CCBSI)
     
  By: /s/ Michael A. Kamauf
  Name: Michael A. Kamauf
  Title: Authorized Officer

 

[Signature page to Restructuring Support Agreement]

 

 

 

  Royal Bank of Canada
  as a Consenting RBL Lender
     
  By: /s/ H. Christopher DeCotiis
  Name: H. Christopher DeCotiis, CFA
  Title: Attorney-in-Fact

 

[Signature page to Restructuring Support Agreement]

 

 

 

  BANC OF AMERICA CREDIT PRODUCTS, INC. (“BACP”), solely in respect of its Global Credit and Special Situations Group and not any other unit, group, division or affiliate of BACP as a Consenting RBL Lender
     
  By: /s/ Jennifer Koszta
  Name: Jennifer Koszta
  Title: Assistant Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  Bank of America, N.A.
  as a Consenting RBL Lender
   
  By: /s/ Kevin M. Behan
  Name: Kevin M. Behan
  Title: Managing Director

 

[Signature page to Restructuring Support Agreement]

 

 

 

  ZB, N.A. DBA AMEGY BANK,
  as a Consenting RBL Lender
     
  By: /s/ John Moffitt
  Name: John Moffitt
  Title: Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  The Bank of Nova Scotia,
  as a Consenting RBL Lender
     
  By: /s/ Thane Rattew
  Name: Thane Rattew
  Title: Managing Director

 

[Signature page to Restructuring Support Agreement]

 

 

 

  AG ENERGY FUNDING, LLC,
  as a Consenting RBL Lender
     
  By: /s/ Todd Dittmann
  Name: Todd Dittmann
  Title: Authorized Person

 

[Signature page to Restructuring Support Agreement]

 

 

 

 

  Canadian Imperial Bank of Commerce,
  New York Branch
  as a Consenting RBL Lender
     
  By: /s/ E. Lindsay Gordon
  Name: E. Lindsay Gordon
  Title: Executive Director

 

[Signature page to Restructuring Support Agreement]

 

 

 

  Wells Fargo Bank, N.A.,
  as a Consenting RBL Lender
     
  By: /s/ Max Gilbert
  Name: Max Gilbert
  Title: Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  CITIBANK, N.A.
  as a Consenting RBL Lender
     
  By: /s/ Jeff Ard
  Name: Ard, Jeff
  Title: Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  ING CAPITAL LLC,
  as a Consenting RBL Lender
     
  By: /s/ Juli Bieser
  Name: Juli Bieser
  Title: Managing Director
     
  By: /s/ Charles Hall
  Name: Charles Hall
  Title: Managing Director

 

[Signature page to Restructuring Support Agreement]

 

 

 

  Compass Bank,
  as a Consenting RBL Lender
     
  By: /s/ William H. Douning
  Name: William H. Douning
  Title: Senior Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  COMERICA BANK,
  as a Consenting RBL Lender
     
  By: /s/ Jeffrey M. Parilla
  Name: Jeffrey M. Parilla
  Title: Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  Frost Bank
  as a Consenting RBL Lender
     
  By: /s/ Dan Guarino
  Name: Dan Guarino
  Title: Executive Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  REGIONS BANK,
  as a Consenting RBL Lender
     
  By: /s/ J. Patrick Carrigan
  Name: J. Patrick Carrigan
  Title: Senior Vice President

 

[Signature page to Restructuring Support Agreement]

 

 

 

  ENERVEST PARTIES:
   
  ENERVEST, LTD.
  By: EnerVest Management GP, L.C.,
    its general partner
     
  By: /s/ John B. Walker
  Name: John B. Walker
  Title: Chief Executive Officer
     
  ENERVEST OPERATING, L.L.C.
     
  By: /s/ John B. Walker
  Name: John B. Walker
  Title: Executive Chairman

 

 

 

Exhibit A to the Restructuring Support Agreement

 

 

Execution Version

 

ev energy partners, L.P.
 

RESTRUCTURING TERM SHEET

 

March 13, 2018

 

This term sheet (the “Restructuring term sheet”) DESCRIBES the material terms of the proposed restructuring (the “RESTRUCTURING”) of ev energy partners, L.P. ( “evep”) and CERTAIN OF ITS DIRECT AND INDIRECT SUBSIDIARIES AND AFFILIATES (collectively, the “company” or the “debtors”)1 pursuant to A PRE-PACKAGED CHAPTER 11 plan of reorganization (THE “PRE-PACKAGED PLAN”), which will BE filed in connection with VOLUNTARY cases (thE “CHAPTER 11 CASES”) TO BE commenced by the company UNDER CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE (THE “BANKRUPTCY CODE”) in THE united states bankruptcy court for the district of Delaware (the “Bankruptcy Court”).

 

THIS RESTRUCTURING TERM SHEET IS FOR DISCUSSION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OF SECURITIES OR A SOLICITATION OF THE ACCEPTANCE OR REJECTION OF A CHAPTER 11 PLAN OF REORGANIZATION FOR THE PURPOSES OF SECTION 1125 AND 1126 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.

 

This RESTRUCTURING Term Sheet does not include a description of all of the terms, conditions, and other provisions that are to be contained in the Pre-Packaged Plan, and other definitive documentation governing the Restructuring. SUCH Definitive Documents shall satisfy the requirements of all applicable securities laws, the Bankruptcy Code, the RSA (AS DEFINED BELOW) and this RESTRUCTURING Term Sheet.

 

Overview

 

Restructuring Summary   To effectuate the Restructuring, EVEP, EV Energy GP, LP (“EV Energy GP”), EV Management LLC (“EV Management”), certain of EVEP’s wholly owned subsidiaries, EnerVest, Ltd. (“EnerVest”) EnerVest Operating, L.L.C. (“EVOC” and together with EnerVest, the “EnerVest Parties”), the Consenting Noteholders (as defined in the RSA), and the Consenting RBL Lenders (as defined in the RSA) shall execute a restructuring support agreement (the “RSA”) consistent in all respects with the material terms set forth herein.  This Restructuring Term Sheet and the term sheet setting forth additional provisions regarding the treatment of the RBL Facility Claims (the “RBL Term Sheet”) shall be attached to, and incorporated into, the RSA.

 

 

1The following entities will be Debtors: (a) EV Energy Partners, L.P.; (b) EV Properties, L.P.; (c) EV Properties GP, LLC; (d) Enervest Production Partners, Ltd.; (e) EVPP GP, LLC; (f) CGAS Properties, L.P.; (g) EVCG GP, LLC; (h) Enervest Monroe Marketing, Ltd.; (i) Enervest Monroe Gathering, Ltd.; (j) EV Energy GP, LP; (k) EV Management, LLC; (l) EV Energy Finance Corp; (m) Belden & Blake, LLC; and (n) EnerVest Mesa, LLC.

 

 

 

 

 

   

The effective date of the Restructuring (the “Effective Date”) will be the date on which all conditions to the effectiveness of the Pre-Packaged Plan have been satisfied or waived in accordance with its terms and the Pre-Packaged Plan has been consummated.

 

All of the Debtors from and after the Effective Date shall be referred to herein as the “Reorganized Debtors.”

 

Restructuring Documents   All documents implementing the Restructuring (collectively, the “Restructuring Documents”) shall be consistent in all material respect with this Restructuring Term Sheet and the RSA, as applicable, and, except as otherwise provided herein, shall be in form and substance acceptable to the Company and the Required Consenting Noteholders (as defined in the RSA), including, without limitation (i) the Pre-Packaged Plan and all documents contained in any supplement thereto, including any exhibits, schedules, amendments, modifications or supplements thereto, (ii) the disclosure statement for the Pre-Packaged Plan (the “Disclosure Statement”) and all other solicitation materials, (iii) the order confirming the Pre-Packaged Plan (the “Confirmation Order”), (iv) the order approving the Disclosure Statement (the “Disclosure Statement Order”), and (v) all other documents identified as “Restructuring Documents” in the RSA. To the extent set forth in the RSA, the Restructuring Documents shall also be in form and substance satisfactory to the Required Consenting RBL Lenders (as defined in the RSA).

 

Current Capital Structure

 

RBL Facility   Indebtedness under that certain reserve-based lending facility (the “RBL Facility”) among EVEP, as parent, EV Properties, L.P., as borrower, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), the guarantors party thereto, and the lenders signatory thereto from time to time (the “RBL Lenders”) (as may be amended, supplemented, amended and restated, or otherwise modified from time to time, the “RBL Credit Agreement”), comprising revolving loans in an aggregate principal amount outstanding of not less than $269,000,000 as of the date hereof (the “RBL Loans”) plus all accrued and unpaid interest, fees and other obligations payable under the RBL Credit Agreement.

 

 2 

 

 

  RBL Facility Claims” shall mean any and all Claims (as defined in Bankruptcy Code section 101(5)) and obligations arising under or related to the RBL Facility.

 

Senior Notes  

Indebtedness evidenced by those certain 8.00% senior unsecured notes due April 2019 (such notes the “Notes” and, the holders of such notes, the “Noteholders”), issued pursuant to that certain indenture, dated as of March 22, 2011 (as may be amended, supplemented, amended and restated, or otherwise modified from time to time, the “Indenture”), by and among EVEP, EV Energy Finance Corp., the guarantors party thereto, and U.S. Bank National Association as trustee (the “Notes Trustee”), in an aggregate principal amount outstanding of $343,348,000.

 

Notes Claims” shall mean any and all Claims and obligations arising under or related to the Notes.

     
Existing Equity Interests   Ultimate equity interests in EVEP, including warrants, rights and options to acquire such equity interests (collectively, “Existing Equity Interests” and, the holders of such Existing Equity Interests, the “Existing Unitholders”).

 

Treatment of Claims and Interests

 

Administrative Expenses, Tax Claims, and Other Priority Claims   Each holder of an allowed administrative expense, priority tax Claim or other priority Claim shall be paid in full in cash on the Effective Date, or in the ordinary course of business as and when due, or otherwise receive treatment consistent with the provisions of Bankruptcy Code section 1129(a), in each case, as determined by the Debtors with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld, conditioned, or delayed).
     
Professional Fee Claims   All final requests for payment for professional services rendered or costs incurred on or after the petition date of the Chapter 11 Cases (the “Petition Date”) and on or prior to the Effective Date by professional persons retained by the Debtors or any statutory committee appointed in the Chapter 11 Cases pursuant to sections 327, 328, 329, 330, 331, 503(b), or 1103 of the Bankruptcy Code must be filed no later than sixty (60) days after the Effective Date.

 

 3 

 

 

RBL Facility Claims   The RBL Facility Claims shall be allowed in the aggregate principal amount of approximately $269,237,6002, plus accrued and unpaid interest as of the Effective Date, plus all fees, expenses and other amounts that constitute Secured Obligations (as defined in the Guarantee and Collateral Agreement).3 The reasonable costs, fees and expenses of the Administrative Agent shall be paid in full, in cash on the Effective Date.
     
   

On the Effective Date, the RBL Credit Agreement shall be amended (the “Amended RBL Credit Agreement”) in a manner consistent with the RBL Term Sheet and otherwise in form and substance satisfactory to the Required Consenting Noteholders, the Required Consenting RBL Lenders, the Debtors and the administrative agent under the Amended RBL Credit Agreement (the “Exit Facility Agent”). 

     
    Each holder of an allowed RBL Facility Claim that votes to accept the Pre-Packaged Plan (the “Consenting RBL Lenders”) shall receive, in full and final satisfaction, settlement, release, and discharge of and in exchange for such Claim, (i) new revolving loans under the Amended RBL Credit Agreement in an amount equal to the principal amount of RBL Loans held by such Consenting RBL Lender as of the Effective Date, (ii) cash in an amount equal to the accrued but unpaid interest payable to such Consenting RBL Lender under the RBL Credit Agreement as of the Effective Date and (iii) unfunded commitments and letter of credit participation under the Amended RBL Credit Agreement equal to the unfunded commitments (if any) and letter of credit participation of such Consenting RBL Lender as of the Effective Date (it being understood the unfunded commitments and letter of credit participations of Non-Consenting RBL Lenders shall not be reallocated amongst the Consenting RBL Lenders and the Reorganized Debtors shall cash collateralize the letter of credit participations of such Non-Consenting RBL Lenders)).

 

 

2Subject to increase to the extent of any further borrowings under the RBL Credit Agreement after the date hereof.
3The Debtors do not anticipate any RBL Claims arising under any Secured Swap Agreement (as defined in the Guarantee and Collateral Agreement) because such Secured Swap Agreement will either not be terminated prior to the Effective Date or will not result in a Claim against the Debtors. To the extent a Secured Swap Agreement is terminated and results in a Claim, such Claim will be paid in cash in full on the Effective Date unless the holder thereof elects different treatment.

 

 4 

 

 

   

Letters of credit issued and outstanding under the existing RBL Credit Agreement as of the Effective Date shall be deemed issued under the Amended RBL Credit Agreement, and the Consenting RBL Lenders will hold pro rata participations in such letters of credit, subject to such Consenting RBL Lender’s commitment amount.

 

Each holder of an allowed RBL Facility Claim that (x) votes to reject the Pre-Packaged Plan , or (y) fails to submit a ballot by the voting deadline (the “Non-Consenting RBL Lenders”) shall receive, in full and final satisfaction, settlement, release, and discharge of and in exchange for such Claim, (i) new term loans under a new term loan facility (the “Alternative Term Loan Facility”) in an amount equal to the RBL Loans held by such holder as of the Effective Date and (ii) cash in an amount equal to the accrued but unpaid interest payable to such Non-Consenting RBL Lender under the RBL Credit Agreement as of the Effective Date. The terms of the Alternative Term Loan Facility shall be as set forth in the RBL Term Sheet and otherwise in form and substance acceptable to the Required Consenting Noteholders, the Debtors, the Required Consenting RBL Lenders and the Exit Facility Agent.

     
   

The Non-Consenting RBL Lenders shall be deemed party to and bound by the credit agreement governing the Alternative Term Loan Facility (which may be the Amended RBL Credit Agreement) as of the Effective Date without the need of such Non-Consenting RBL Lenders executing signature pages.

     
   

Intercreditor arrangements in form and substance acceptable to the Exit Facility Agent, the agent for the Alternative Term Loan Facility (if any), the Required Consenting RBL Lenders, the Debtors and the Required Consenting Noteholders shall be incorporated into the Amended RBL Credit Agreement or a separate intercreditor agreement as such parties may determine. 

     
Other Secured Claims   To the extent that any other secured Claims exist, on or as soon as practicable after the Effective Date, holders of such secured Claims allowed as of the Effective Date, if not paid previously, shall, at the option of the Debtors, with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld, conditioned, or delayed), either (i) be satisfied by payment in full in cash, (ii) have their Claims reinstated pursuant to section 1124 of the Bankruptcy Code, or (iii) receive such other recovery as is necessary to satisfy section 1129 of the Bankruptcy Code.

 

 5 

 

 

Notes Claims   The Notes Claims shall be allowed in the aggregate principal amount of approximately $343,348,000, plus accrued and unpaid interest as of the Petition Date. The reasonable costs, fees and expenses of the Indenture Trustee as provided under the Indenture shall be paid in full, in cash on the Effective Date.
     
   

On the Effective Date, in full and final satisfaction, settlement, release, and discharge of and in exchange for the Notes Claims, each holder of a Notes Claim shall receive its pro rata share of 95% of the shares of common stock of New EVEP Parent Inc. (as defined below) (the “New Equity Interests) (subject to dilution by the MIP Shares and New Equity Interests issued in respect of the New Warrants (each as defined below)), which New Equity Interests are expected to be issued under the Pre-Packaged Plan in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, under section 1145 of the Bankruptcy Code, or to the extent unavailable, another available exemption from registration. 

     
General Unsecured Claims   On the Effective Date or as soon as reasonably practicable thereafter, except to the extent that a holder of an allowed general unsecured claim has already been paid during the Chapter 11 Cases or such holder agrees to less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for its allowed general unsecured claim, each holder of an allowed general unsecured claim shall receive, at the applicable Debtor’s option: (i) if such allowed general unsecured claim is due and payable on or before the Effective Date, payment in full, in cash, of the unpaid portion of its allowed general unsecured claim; (ii) if such allowed general unsecured claim is not due and payable before the Effective Date, payment in the ordinary course of business consistent with past practices; or (iii) other treatment, as may be agreed upon by the Debtors, the Required Consenting Noteholders and the holder of such allowed general unsecured claim, such that the allowed general unsecured claim shall be rendered unimpaired pursuant to section 1124(1) of the Bankruptcy Code.

 

 6 

 

 

Existing Equity Interests   On the Effective Date, each Existing Unitholder, in full and final satisfaction, settlement, release, and discharge of and in exchange for its Existing Equity Interests, shall receive its pro rata share of (i) 5% of the New Equity Interests (subject to dilution by the MIP Shares and New Equity Interests issued in respect of the New Warrants), which New Equity Interests are expected to be issued under the Pre-Packaged Plan in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, under section 1145 of the Bankruptcy Code, or to the extent unavailable, another available exemption from registration and (ii) 5-year warrants for 8% of the New Equity Interests (subject to dilution by the MIP Shares), with a strike price set at an equity value at which the Noteholders would receive a recovery equal to par plus accrued and unpaid interest as of the Petition Date in respect of the Notes (after taking into account value dilution on account of the Initial MIP Allocation (as defined below)), (the “New Warrants”) and with such other terms as are acceptable to the Debtors and the Required Consenting Noteholders, which New Warrants and New Equity Interests issuable upon the exercise of such New Warrants are expected to be issued under the Pre-Packaged Plan in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, under section 1145 of the Bankruptcy Code, or to the extent unavailable, another available exemption from registration.
     
Intercompany Claims   All allowed pre-petition or post-petition Claims held by a Debtor against any other Debtor shall be adjusted, continued or discharged to the extent determined appropriate by the Debtors, with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld, conditioned, or delayed).
     
Intercompany Interests   All equity interests in a Debtor that are held by another Debtor shall be reinstated for administrative convenience, except to the extent different treatment is required for the purposes of implementing the Reorganized Debtors’ Corporate Structure (as defined below), as determined by the Required Consenting Noteholders, in consultation with the Debtors.

 

 7 

 

 

Other Terms

 

Corporate Structure of Reorganized Debtors   Unless the Required Consenting Noteholders determine otherwise, in consultation with the Debtors and the Administrative Agent, the corporate structure of the Reorganized Debtors (the “Reorganized Debtors’ Corporate Structure”) will result in the Reorganized Debtors emerging on the Effective Date with New EVEP Parent Inc. (as defined below), a C-corporation, as the ultimate parent. A summary of the Restructuring Transactions (as defined below) are described below.
     
Summary of Restructuring Transactions   Pursuant to the Plan, the following transactions (the “Restructuring Transactions”) shall occur in the order specified below:

 

    1. On the Effective Date, (i) the members of the Ad Hoc Committee4 will contribute their Notes (the “Contributed Notes”) to a newly formed C-corporation (“New EVEP Parent Inc.”) in exchange for all of the then outstanding New Equity Interests, (ii) EV Midstream, LP (which will make a “check the box” election to be taxed as a corporation subsequent to the transfer of its equity to Acquisition, Inc.), will transfer $790,000 to New EVEP Parent Inc. in exchange for 79% of preferred equity of New EVEP Parent Inc. (the “Class A Preferred”), and (iii) the remaining 21% of the Class A Preferred will be distributed to one or more employees of the Reorganized Debtors (or EnerVest) and/or members of the New Board (as defined below), as determined by the Debtors and the Required Consenting Noteholders; provided that such employee(s) and/or member(s) of the New Board do not own any Existing Equity Interests.  The Class A Preferred is expected to be issued in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, under section 1145 of the Bankruptcy Code, or to the extent unavailable, another available exemption from registration.
       
    2. On the Effective Date and in connection with step 1, New EVEP Parent Inc. will contribute to a newly formed subsidiary (“Acquisition Inc.”) (i) the Contributed Notes, (ii) a number of shares of New Equity Interests sufficient to satisfy (a) the Notes Claims other than the Notes Claims in respect of the Contributed Notes and (b) shares of New Equity Interests to be distributed to the Existing Unitholders, and (iii) New Warrants to be distributed to the Existing Unitholders. In the transaction, New EVEP Parent Inc. receives all of the stock of Acquisition Inc.

 

 

4Ad Hoc Committee” means that certain ad hoc group of Senior Noteholders represented by Akin Gump Strauss Hauer & Feld LLP.

 

 8 

 

 

    3. On the Effective Date, Acquisition Inc. will acquire all of the assets of EVEP and certain liabilities not discharged, satisfied or as otherwise provided for under the Pre-Packaged Plan in exchange for (i) the Contributed Notes, (ii) the New Equity Interests it received from New EVEP Parent Inc., and (iii) the New Warrants.
       
    4. On the Effective Date, the Company will distribute the New Equity Interests and the New Warrants, as applicable, it received from Acquisition Inc. to the (i) Noteholders that did not contribute Contributed Notes and (ii) Existing Unitholders.

 

    At the conclusion of these steps, the Noteholders will directly own 95% of the New Equity Interests and 5% will be owned by the Existing Unitholders, subject in each case to dilution by the MIP Shares, and New Equity Interests issued in respect of the New Warrants.
     
Tax Matters   The Restructuring and the transactions related thereto will be structured to minimize cancellation of-debt income for the Existing Unitholders and otherwise structured in a tax efficient manner for the Company and the Noteholders, in each case as mutually agreed by the Company and the Required Consenting Noteholders, provided that such structure must not have adverse tax consequences for the Noteholders, as determined by the Required Consenting Noteholders.
     
Corporate Governance Documents   The corporate governance documents for the Reorganized Debtors (the “Corporate Governance Documents”) shall be in form and substance acceptable to the Required Consenting Noteholders in their sole discretion; provided that the Corporate Governance Documents shall also be subject to the consent of the Debtors (which consent shall not be unreasonably withheld, conditioned, or delayed). The Corporate Governance Documents shall include a registration rights agreement for the benefit of the Consenting Noteholders.

 

 9 

 

 

New Board   The board of directors of New EVEP Parent Inc. (the “New Board”) will consist of 5–7 members, one of whom shall be the chief executive officer of New EVEP Parent Inc., and the remainder of whom shall be designated by the Required Consenting Noteholders. Current members of the board of directors of EVEP who wish to serve on the New Board shall be interviewed by the Consenting Noteholders.
     
Class A Preferred   The Class A Preferred will (i) have a cumulative initial face amount of $1,000,000.00, (ii) be entitled to a semiannual dividend (which shall be in kind unless New EVEP Parent Inc. elects otherwise) at the annual rate of 5% unless mutually agreed otherwise by the Debtors and Required Consenting Noteholders, (iii) be entitled to vote to elect one director in the event that dividends with respect to such Class A Preferred shall not have been paid for a period of two consecutive quarters (it being understood that payment of a dividend in kind shall not be a failure to pay such dividend), (iv) shall not be able to be redeemed for a period of at least two (2) years from the Effective Date, (v) shall be optionally redeemable by New EVEP Parent Inc. (at any time after five (5) years from the Effective Date), (vi) shall be subject to redemption after 21 years from the Effective Date at the election of the holders, and (vii) upon a sale, shall receive par plus any accrued dividends.
     
Management Incentive Plan; Employment Agreements   The New Board will adopt a management incentive plan (the “MIP”), pursuant to which up to 6% of the New Equity Interests outstanding on the Effective Date (on a fully diluted and fully distributable basis) (the “MIP Shares”) shall be reserved for grant to participants. Three percent (3%) of the New Equity Interests outstanding on the Effective Date (on a fully diluted and fully distributable basis) (i.e., 50% of the maximum amount of MIP Shares) shall be allocated to participants in the MIP on or shortly following the Effective Date (the “Initial MIP Allocation”) in a manner mutually agreed by the Company and the Required Consenting Noteholders. The award granted pursuant to the Initial MIP Allocation shall vest over the three-year period following the Effective Date, with one-third of such Initial MIP Allocation vesting on each of the first three anniversaries of the Effective Date, subject to the participant’s continued employment on any applicable vesting date. In addition to the time vesting component applicable to the entire award granted pursuant to the Initial MIP Allocation, the vesting of 50% of such award also shall be based on the attainment of specified metrics based upon the performance of the Reorganized Debtors, which metrics shall be mutually agreed by the Debtors and the Required Consenting Noteholders. Any grants of the remaining New Equity Interests constituting MIP Shares shall be based upon the Reorganized Debtors post-emergence performance and be on such other terms as determined by the New Board. All of the MIP Shares shall be full value awards (i.e., restricted stock units (or their equivalent based upon the Reorganized Debtors’ Corporate Structure)).

 

 10 

 

 

    The Debtors’ existing management employment agreements shall be amended to account for the Reorganized Debtors’ corporate structure and the other terms of the Plan.
     

New Omnibus Agreement

  On the Effective Date, (i) that certain omnibus agreement by and among EnerVest, EV Management, EV Energy GP, EVEP and EV Properties, L.P. entered into on September 29, 2006 (as may be amended, supplemented, amended and restated or otherwise modified from time to time, the “Existing Omnibus Agreement”) shall be terminated (subject to the satisfaction of any payment obligations thereunder due and owing in connection with such termination, which payments shall be agreed to by the Debtors, the Required Consenting Noteholders, and the EnerVest Omnibus Parties) and be of no further force and effect and (ii) (a) the Reorganized Debtors and (b) EnerVest and EVOC (the “EnerVest Omnibus Parties” shall enter into a new omnibus agreement (the “New Omnibus Agreement”) governing the reimbursement of general and administrative expenses incurred by the EnerVest Omnibus Parties on behalf of the Reorganized Debtors (the “G&A Expenses”), which New Omnibus Agreement shall be in form and substance acceptable to the Debtors, the Required Consenting Noteholders, and the EnerVest Omnibus Parties, and which also shall be subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld).

 

 11 

 

 

    The New Omnibus Agreement shall provide for the payment by the Reorganized Debtors of a monthly fee (the “Monthly Fee”), which fee shall cover any and all G&A Expenses incurred by the EnerVest Omnibus Parties on behalf of the Reorganized Debtors; provided that the New Omnibus Agreement shall also contain a provision regarding the reimbursement by the Reorganized Debtors of the EnerVest Omnibus Parties on account of extraordinary expenses not covered by the Monthly Fee (the “Extraordinary Expenses”), which provision will contain restrictions and limitations with respect to the Reorganized Debtors’ obligations to provide reimbursement for any such expenses; provided, further, that the New Omnibus Agreement also shall provide that other than (x) pursuant to the Monthly Fee and the provisions addressing the reimbursement of Extraordinary Expenses and (y) any payments that the Reorganized Debtors are contractually required to make to the EnerVest Parties pursuant to any joint operating agreements, the Reorganized Debtors shall have no other obligations to make payments to, or for the benefit of, the EnerVest Omnibus Parties, unless (A) prior to the Effective Date, such obligation is subject of a separate written agreement in form and substance acceptable to the Debtors, the Required Consenting Noteholders, and the EnerVest Parties, and which also shall be subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld) or (B) after the Effective Date, such obligation is approved by the New Board.
     
Payroll Process and Employee Benefits  

The Debtors, the Required Consenting Noteholders and the EnerVest Parties shall negotiate in good faith regarding whether the EnerVest Parties (or any of their affiliates) will continue to provide, after the Effective Date, payroll processing, employee benefits and other related services substantially similar to those in effect on the date hereof (collectively, the “Employee Services/Benefits”) to or for the benefit of employees of the Reorganized Debtors. 

     
    To the extent the EnerVest Parties (or any of their affiliates) agree to continue to provide such Employee Services/Benefits after the Effective Date, on or prior to the Effective Date, the Reorganized Debtors and the EnerVest Parties (or their affiliates) shall enter into a services agreement with respect thereto, which agreement shall be in form and substance mutually acceptable to the Debtors, the Required Consenting Noteholders and the EnerVest Parties.
     
    To the extent the EnerVest Parties (or their affiliates) do not agree to continue to provide such Employee Services/Benefits after the Effective Date, on the Effective Date the Reorganized Debtors shall hire a third-party benefits provider, which provider will administer new compensation and benefits plans, in each case acceptable to the Debtors and the Required Consenting Noteholders.

 

 12 

 

 

Other Operating Agreements   Joint operating agreements and other operating agreements to which the Debtors are currently party shall be modified in a manner acceptable in form and substance to the Required Consenting Noteholders, and which modifications, if any, also shall be subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld).
     
Executory Contracts and Unexpired Leases  

Each executory contract and unexpired lease shall be assumed or rejected as determined by the Debtors, with the consent of the Required Consenting Noteholders; provided that the Pre-Packaged Plan shall provide that all executory contracts and unexpired leases shall be deemed assumed unless expressly rejected.

 

     
Restructuring Expenses   The Debtors shall pay all reasonable and documented fees and out of pocket expenses of (i) one primary counsel to the Ad Hoc Committee, Akin Gump Strauss Hauer & Feld LLP, (ii) one local counsel to the Ad Hoc Committee (if necessary), (iii) one financial advisor to the Ad Hoc Committee, Intrepid Financial Partners, (iv) one primary counsel for the Administrative Agent, Simpson Thacher & Bartlett LLP, (v) one local counsel to the Administrative Agent (if necessary) and (vi) one financial advisor to the Administrative Agent, RPA Advisors, in each case, that are due and owing after receipt of applicable invoices, without any requirement for the filing of fee or retention applications in the Chapter 11 Cases, with any balance(s), including estimates of fees and expenses to be incurred through the Effective Date, paid on the Effective Date (collectively, the “Restructuring Expenses”).
     
Conditions Precedent to Consummation of the Pre-Packaged Plan  

The Pre-Packaged Plan shall contain customary conditions to effectiveness as may be agreed upon by the Debtors and the Required Consenting Noteholders and the Required Consenting RBL Lenders, including, without limitation:

 

 

    · the Amended RBL Credit Agreement and, if necessary, the Alternative Term Loan Facility, including, in each case, all documentation related thereto, shall be in form and substance consistent with the RBL Term Sheet and otherwise in form and substance acceptable to the Debtors, the Required Consenting RBL Lenders, the Exit Facility Agent and the Required Consenting Noteholders;

 

 13 

 

 

    · the New Omnibus Agreement shall be in form and substance acceptable to the Debtors, the Required Consenting Noteholders, and the EnerVest Omnibus Parties, and also shall be subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld);
       
    · the joint operating agreements and other operating agreements to which the Company is currently a party shall be modified in a manner in form and substance acceptable to the Debtors, and the Required Consenting Noteholders and which modifications, if any, also shall be subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld);
       
    ·

the New Warrants and the agreement governing the New Warrants (the “New Warrant Agreement”) shall be in form and substance acceptable to the Debtors, the Required Consenting Noteholders and the EnerVest Parties;

 

    · the Corporate Governance Documents and any organizational documents for the Reorganized Debtors shall be in form and substance acceptable to the Required Consenting Noteholders in their sole discretion; provided that the Corporate Governance Documents shall also be subject to the consent of the Debtors (which consent shall not be unreasonably withheld, conditioned or delayed);
       
    · the Bankruptcy Court shall have entered the Disclosure Statement Order, in form and substance acceptable to the Debtors, the Required Consenting RBL Lenders and the Required Consenting Noteholders;
       
    · the Bankruptcy Court shall have entered the Confirmation Order in form and substance acceptable to the Debtors, the Required Consenting RBL Lenders and the Required Consenting Noteholders, which order shall have become a final order that is not stayed;
       
    · the Debtors shall have paid the Restructuring Expenses in full, in cash; and

 

 14 

 

 

    · the Debtors shall have received all governmental or other approvals required to effectuate the terms of the Pre-Packaged Plan.

 

Retained Causes of Action   The Pre-Packaged Plan shall contain customary provisions regarding retention of causes of action.
     
Debtor and Third Party Releases   Released Party” means, collectively, in each case solely in their respective capacities as such: (a) the Debtors and the Reorganized Debtors; (b) the Consenting Noteholders and all other Noteholders; (c) the Notes Trustee; (d) the Ad Hoc Committee and its members; (d) the Consenting RBL Lenders; (e) the Administrative Agent; (f) each of the EnerVest Parties; and (g) with respect to each of the foregoing entities described in clauses (a) through (f), such entity’s current and former affiliates, partners, subsidiaries, officers, directors, principals, employees, agents, managed funds, advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, together with their respective successors and assigns, in each case in their capacity as such.
     
    Debtor Releases. Pursuant to section 1123(b) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan, on and after the Effective Date, the Released Parties shall be deemed released and discharged by the Debtors, their estates, and the Reorganized Debtors from any and all claims, obligations, debts, rights, suits, damages, causes of action, remedies, and liabilities whatsoever, including any derivative claims asserted on behalf of the Debtors or Reorganized Debtors, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that the Debtors, their respective estates or the Reorganized Debtors would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any claim or equity interest or other entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, the Restructuring, the Chapter 11 Cases, the purchase, sale, or rescission of the purchase or sale of any security or loans of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any claim or equity interest that is treated in the Pre-Packaged Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of claims and equity interests prior to or in the Chapter 11 Cases, the RSA, the negotiation, formulation, or preparation of the Pre-Packaged Plan, the Disclosure Statement, or any other Restructuring Documents, any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, other than claims or liabilities arising out of or relating to any act or omission of a Released Party that constitutes fraud, willful misconduct or gross negligence; provided that the foregoing shall not operate to waive and release any claims, obligations, debts, rights, suits, damages, causes of action, or remedies of the Debtors or Reorganized Debtors (x) expressly preserved by the Pre-Packaged Plan or (y) arising under or related to any agreements or documents executed to implement the Pre-Packaged Plan and the Restructuring or assumed pursuant to the Pre-Packaged Plan.

 

 15 

 

 

    Third-Party Releases. As of the Effective Date, (a) the Consenting Noteholders; (b) the Consenting RBL Lenders; (c) the Notes Trustee; (d) the Administrative Agent; (e) the EnerVest Parties; (f) each holder of a Claim entitled to vote to accept or reject the Pre-Packaged Plan that (i) votes to accept the Pre-Packaged Plan or (ii) votes to reject the Pre-Packaged Plan or does not vote to accept or reject the Pre-Packaged Plan but does not affirmatively elect to “opt out” of being a releasing party by timely objecting to the Pre-Packaged Plan’s third-party release provisions; (g) each holder of a Claim or Existing Equity Interest that is Unimpaired and presumed to accept the Pre-Packaged Plan; (h) each holder of a Claim or Existing Equity Interest that is deemed to reject the Pre-Packaged Plan that does not affirmatively elect to “opt out” of being a releasing party by timely objecting to the Pre-Packaged Plan’s third-party release provisions; and (i) with respect each of the Debtors, the Reorganized Debtors and the foregoing entities described in clauses (a) through (h), such entities’ current and former affiliates, and such entities’ and such affiliates’ partners, subsidiaries, predecessors, current and former directors, managers, officers, equity holders (regardless of whether such interests are held directly or indirectly), members, officers, principals, employees, agents, managed accounts or funds, advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors, and other professionals, together with their respective successors and assigns, in each case in their capacity as such, shall be deemed to have conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged the Debtors, the Reorganized Debtors and the Released Parties from any and all claims, equity interests, obligations, debts, rights, suits, damages, causes of action, remedies, and liabilities whatsoever, including any derivative claims asserted on behalf of a Debtor or Reorganized Debtor, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, the Restructuring, the Chapter 11 Cases, the RSA, the purchase, sale, or rescission of the purchase or sale of any security or loans of the Debtors, the subject matter of, or the transactions or events giving rise to, any claim or equity interest that is treated in the Pre-Packaged Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of claims and equity interests prior to or in the Chapter 11 Cases, the negotiation, formulation, or preparation of the Pre-Packaged Plan, the Disclosure Statement, or any other Restructuring Documents, any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, other than claims or liabilities arising out of or relating to any act or omission of a Released Party that constitutes fraud, willful misconduct or gross negligence; provided that the foregoing shall not operate to waive and release any claims, obligations, debts, rights, suits, damages, causes of action, or remedies of the Debtors or Reorganized Debtors (x) expressly preserved by the Pre-Packaged Plan or (y) arising under or related to any agreements or documents executed to implement the Pre-Packaged Plan and the Restructuring or assumed pursuant to the Pre-Packaged Plan.

 

 16 

 

Exhibit B to the Restructuring Support Agreement

 

 

Execution Version

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

Summary of Terms and Conditions

 

March 13, 2018

 

 

 

Set forth below is a summary of the principal terms and conditions for the Amended Revolving Credit Facility (defined below) and does not constitute a commitment to lend or otherwise provide any financing. Any commitment will be set forth in the Restructuring Support Agreement to which this Exhibit B is attached and be subject to the satisfaction of the conditions precedent contemplated herein. Unless otherwise indicated, capitalized terms used but not defined herein have the meanings set forth in the Existing Credit Agreement (defined below).

 

I.Parties

 

Borrower: EV Properties, L.P. (as such entity may be reorganized pursuant to an Acceptable Plan of Reorganization (as defined below)) (the “Borrower”).
   
Parent New EVEP Parent, Inc. (as defined in the Restructuring Support Agreement) (the “Parent”).
   
Guarantors: Each of the Borrower’s direct and indirect, existing and future, wholly-owned material subsidiaries (the “Subsidiaries”) and the Parent (each a “Guarantor”, collectively, the “Guarantors” and, together with the Borrower, the “Loan Parties”).
   
Sole Lead Arranger and Sole Bookrunner: JPMorgan Chase Bank, N.A. (“JPMorgan” and in such capacity, the “Lead Arranger”).
   
Administrative Agent: JPMorgan (in such capacity, the “Administrative Agent”).
   
Syndication Agent: Wells Fargo Bank, National Association (in such capacity, the “Syndication Agent”).
   
Co-Documentation Agents: BBVA Compass and Citibank, N.A. (collectively, in such capacity, the “Co-Documentation Agents”); and together with the Administrative Agent and the Syndication Agent, each an “Agent.”
   
Lenders: A syndicate of banks, financial institutions and other entities consisting of Participating Lenders1, including JPMorgan, [and Non-Participating Lenders2] arranged by the Lead Arranger (collectively, the “Lenders”).

 

 
1A “Participating Lender” is a Lender that (i) executes the Restructuring Support Agreement or (ii) does not execute the Restructuring Support Agreement but votes to accept an Acceptable Plan of Reorganization.

 

2A “Non-Participating Lender” is a Lender that (i) does not execute the Restructuring Support Agreement and (ii) (x) votes to reject an Acceptable Plan of Reorganization or (y) fails to properly submit a ballot.

 

 

 

 

II.Amended Revolving Credit Facility

 

Type and Amount of Facility: A revolving credit facility (the “Amended Revolving Credit Facility”) in the maximum amount of $1.0 billion (the loans thereunder, the “Revolving Credit Loans”).  
   
Availability: The Amended Revolving Credit Facility shall be available on a revolving basis during the period commencing on the Closing Date and ending on the Revolving Credit Termination Date (defined below) in accordance with the terms hereof.  Amounts available under the Amended Revolving Credit Facility at any time shall equal the lesser of the Aggregate Maximum Credit Amounts and the Borrowing Base then in effect, minus the sum of the total credit exposure of the Participating Lenders under the Amended Revolving Credit Facility (the “Revolving Credit Exposure”), the principal amount of all outstanding Alternative Term Loans and unfunded Commitments of the Non-Participating Lenders under the Existing Credit Agreement immediately prior to the Closing Date which are not assumed by Participating Lenders.
   
Letters of Credit: Same as Existing Credit Agreement, provided that as of the Closing Date the LC Commitment shall equal $50.0 million. Letters of Credit outstanding under the Existing Credit Agreement shall be deemed issued and outstanding under the Amended Revolving Credit Facility.
   
Borrowing Base: Same as Existing Credit Agreement; provided:
   
  The Borrowing Base will be $325.0 million from Closing Date until, subject to any Automatic Adjustments (as defined below), April 1, 2019; provided, no party shall request an Interim Redetermination prior to April 1, 2019.  
   
  The initial Scheduled Redetermination shall occur no later than April 1, 2019 (the “Initial Scheduled Redetermination”) (with no decrease of the Borrowing Base, other than any Automatic Adjustments, to take effect before such date), based upon the year-end report(s) prepared by Wright & Co., Cawley, Gillespie & Associates, Inc., or other nationally recognized independent reserve engineer(s) dated as of December 31, 2018 (the “Initial Reserve Report”) and other related information.  

 

  2 

 

 

  The Borrowing Base shall be subject to automatic reductions (each an “Automatic Adjustment”) between redeterminations in connection with:
   
  (i) certain sales or other dispositions (including casualty events) of proved oil and gas reserves included in the most recently delivered Reserve Report, with an aggregate fair market value (as determined by the Administrative Agent) exceeding five percent (5%) of the Borrowing Base then in effect, (ii) any early termination or monetization of or creation of offsetting positions with respect to any hedge or swap agreements given lending value in the then effective Borrowing Base which, when taken together (net of any replacement hedge or swap agreements), have an aggregate lending value exceeding five percent (5%) of the Borrowing Base then in effect, (iii) the issuance of any permitted Unsecured Funded Debt (as defined below) and (iv) the Borrower’s inability, following the expiration of a 60-day cure period, to provide title information with respect to eighty-five percent (85%) of the Oil and Gas Properties included in the most recently delivered Reserve Report.
   
  As used in the Facility Documentation (defined below), “Borrowing Base Deficiency” shall mean, at any time, the sum of the total Revolving Credit Exposure and the principal amount of all outstanding Alternative Term Loans exceeds the Borrowing Base then in effect.

 

Maturity: February 26, 2021 (the “Revolving Credit Termination Date”).
   
Purpose: The proceeds of the Revolving Credit Loans shall be used to amend and restate the Existing Credit Agreement and related Loan Documents, to finance the Loan Parties’ emergence from the Chapter 11 Cases (as defined in the Restructuring Term Sheet) and for general corporate purposes (including financing working capital needs) of the Borrower and its Subsidiaries in the ordinary course of business.
   
Non-Participating Term Loan: Non-Participating Lenders shall receive term loans (the “Alternative Term Loans”) subject to the following terms:

 

  (a)     Alternative Term Loans shall bear interest at a rate equal to LIBOR plus 1.250% per annum and mature on the fifth anniversary of the Closing Date;
   
  (b)     Alternative Term Loans shall be secured equally and ratably with the Revolving Credit Loans;
   
  (c)     Alternative Term Loans shall not amortize or be prepaid prior to the termination and repayment in full of the Amended Revolving Facility; provided, if the Revolving Credit Loans are required to be prepaid with the proceeds of any sales or other dispositions (including casualty events) of Property then the Alternative Term Loans shall be prepaid pro rata, subject to customary exceptions and the expiration of a one year reinvestment option; provided, further, that the Alternative Term Loans may be prepaid with the proceeds of an issuance of equity interests (other than Disqualified Capital Stock) of the Borrower or prepaid with the proceeds of permitted refinancing debt on terms to be agreed.

 

  3 

 

 

  (d)     The Loan Parties shall not be required to make any representations, warranties or covenants in connection with the Alternative Term Loans and defaults applicable to the Alternative Term Loans shall be limited to payment and bankruptcy Events of Default applicable to the Revolving Credit Loans;
   
  (e)     The voting rights of Non-Participating Lenders under the Facility Documentation shall be restricted to matters concerning Alternative Term Loan economics and other items materially adverse to such Lenders.

 

III.Certain Payment Provisions

 

Facility Fees, Letter of Credit Fees and Interest Rates  for Participating Lenders: Same as Existing Credit Agreement; provided, as used in the Facility Documentation, “Borrowing Base Utilization Percentage” shall mean, as of any day, the fraction expressed as a percentage the numerator of which is the sum of the Revolving Credit Exposures on such day plus the aggregate principal amount of all outstanding Alternative Term Loans, and the denominator of which is the Borrowing Base in effect on such day.
   
Upfront Fees: Forty-five (45) basis points on each Participating Lender’s final allocated commitment under the Borrowing Base on the Closing Date.
   
Prepayments and Commitment Reductions: Same as Existing Credit Agreement.

 

IV.Certain Conditions

 

Initial Conditions: The availability of the Amended Revolving Credit Facility shall be conditioned upon satisfaction of conditions precedent which are usual and customary for financings of this type, including, among other things, the following (the date upon which all such conditions precedent shall be satisfied, the “Closing Date”):
   
  (a)     The Loan Parties shall have executed and delivered satisfactory definitive financing documentation with respect to the Amended Revolving Credit Facility and, if applicable, the Alternative Term Loans (the “Credit Documentation”) and the associated collateral security documentation (the “Collateral Documentation”; together with the Credit Documentation, the “Facility Documentation”).

 

  4 

 

 

  (b)     The Lenders, the Administrative Agent and the Lead Arranger shall have received all fees required to be paid, and all expenses for which invoices have been presented, on or before the Closing Date.
   
  (c)     All governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the financing contemplated hereby and the continuing operations of the Loan Parties shall have been obtained and be in full force and effect.
   
  (d)     The Participating Lenders shall have received satisfactory pro forma, consolidated and consolidating financial statements of the Parent and its subsidiaries for the most recent fiscal quarter ended prior to the Closing Date.
   
  (e)     The Administrative Agent shall be reasonably satisfied that the Collateral Documentation creates first priority, perfected liens and security interests on (i) one hundred percent (100%) of the equity interests in the Borrower and each Guarantor (other than Parent) and (ii) substantially all other assets of the Loan Parties (other than certain excluded assets and subject to certain permitted liens and other customary exceptions), including a first priority perfected lien on (A) all cash and cash equivalents held in deposit accounts (other than excluded accounts) and securities accounts and (B) not less than ninety-five percent (95%) of the value of the Oil and Gas Properties evaluated in the Pre-Petition Reserve Report.3
   
  (f)     (i) the Restructuring Support Agreement shall be in full force effect as to Lenders under the Existing Credit Agreement holding no less than 66.667% of the “Revolving Credit Exposure” thereunder; (ii) the Acceptable Plan of Reorganization shall have been confirmed by the Bankruptcy Court pursuant to a confirmation order in form and substance satisfactory to the Administrative Agent, which order has become a final order (unless the Administrative Agent waives the need for a final order); (iii) all conditions to the effectiveness of the Acceptable Plan of Reorganization shall have been satisfied or waived in accordance with the terms of the Acceptable Plan of Reorganization (other than the closing of the Amended Revolving Credit Facility); and (iv) the effective date of such Acceptable Plan of Reorganization shall have occurred (or shall occur contemporaneously with the closing of the Amended Revolving Credit Facility).

 

 

3The “Pre-Petition Reserve Report” means the Reserve Report most recently delivered in connection with the Existing Credit Agreement.

 

 

  5 

 

 

  (g)     The Administrative Agent shall have received, at least five days prior to the Closing Date, all documentation and other information regarding the Loan Parties requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.
   
  (h)     The Participating Lenders shall have received such legal opinions, certificates (including certificates of a secretary and a responsible officer of the Parent, Borrower or such other Loan Party, as applicable, a solvency certificate and a compliance certificate), documents and other instruments as are customary for transactions of this type or as the Administrative Agent may reasonably request, in each case in form and substance reasonably acceptable to the Administrative Agent.
   
  (i)      The Administrative Agent shall have received title information reasonably satisfactory to the Administrative Agent in form and substance, on at least 85% of the total value of the Oil and Gas Properties evaluated in the Pre-Petition Reserve Report.
   
  The term “Acceptable Plan of Reorganization” means a plan of reorganization having the terms and conditions consistent in all respects with the Restructuring Term Sheet attached to the Restructuring Support Agreement as Exhibit A (as in effect on the date hereof or amended in accordance with the terms of the Restructuring Support Agreement) and otherwise in form and substance satisfactory to the Administrative Agent and the Required Consenting RBL Lenders under the Restructuring Support Agreement; provided, however, that any modifications to the terms of such plan of reorganization as reflected in the Restructuring Term Sheet as in effect on the date hereof that (i) adversely impacts the treatment of the claims of the Participating Lenders which will issue or will be deemed to issue Revolving Credit Loans on the Closing Date, (ii) alters the proposed debt capital structure of the Reorganized Debtors or (iii) creates any new material obligations on the Participating Lenders other than as contemplated herein and in the Restructuring Term Sheet as of the date hereof, shall require the consent of all Participating Lenders; provided, further, however, if any Participating Lender does not provide such consent, but consent is otherwise provided by Required Consenting RBL Lenders, such Participating Lender will be deemed a Non-Participating Lender.  For purposes of this paragraph, the terms “Reorganized Debtors”, “Required Consenting RBL Lenders” and “Restructuring Term Sheet” have the meaning given such terms in the Restructuring Support Agreement.
   
On-Going Conditions: Same as Existing Credit Agreement.

 

  6 

 

 

V.Certain Documentation Matters

 

  The Credit Documentation shall contain representations, warranties, covenants and events of default substantially similar to those contained in the Existing Credit Agreement with such modifications as are set forth herein or as are customary for financings of this type (including modification of baskets and thresholds to be agreed), including the following:
   
Financial Covenants: Commencing with the first full fiscal quarter ended after the Closing Date:

 

1.Ratio of Total Debt to EBITDAX for the most recent period of four fiscal quarters for which financial statements are available (the “Leverage Ratio”) not in excess of 4.0 to 1.0.

 

2.Ratio of (i) consolidated current assets (including unused availability under the Amended Revolving Credit Facility, but excluding non-cash assets under FAS 133) to (ii) consolidated current liabilities (excluding non-cash obligations under FAS 133 and current maturities under this Agreement) not less than 1.0 to 1.0.

 

  For purposes of determining the ratio of Total Debt to EBITDAX for the first three fiscal quarters of the Parent following the Closing Date, EBITDAX shall equal (i) EBITDAX for the first such fiscal quarter multiplied by 4, (ii) EBITDAX for the first two such fiscal quarters multiplied by 2 and (iii) EBITDAX for the first three such fiscal quarters multiplied by 4/3, respectively.
   
Unsecured Funded Debt: After the date of the Initial Scheduled Redetermination, the Borrower and/or one or more of its Subsidiaries may issue unsecured funded debt (in whatever form, “Unsecured Funded Debt”) in an aggregate principal amount at any time outstanding not to exceed $350 million; provided that, at the time of such issuance, (i) no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing or result therefrom, (ii) pro forma Leverage Ratio not in excess of 3.5 to 1.0, (iii) such Unsecured Funded Debt does not have any scheduled amortization or any required repurchase or redemption (other than a required offer to repurchase or redeem as a result of a change in control or asset sale) prior to 181 days after the Revolving Credit Termination Date and (iv) the Borrowing Base shall be reduced by an amount equal to the product of 0.25 multiplied by the stated principal amount of such Unsecured Funded Debt.

 

  7 

 

 

  The Borrower will not, and will not permit any Subsidiary to: (i) call, make or offer to make any optional or voluntary redemption of or otherwise optionally or voluntarily redeem (whether in whole or in part) any Unsecured Funded Debt, except that the Borrower may prepay Unsecured Funded Debt with the net cash proceeds of a new issuance of Unsecured Funded Debt or any sale of equity interests (other than Disqualified Capital Stock) of the Parent or (ii) amend, modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Unsecured Funded Debt if the effect thereof would be to shorten its maturity to a date prior to the date that is 181 days after the Revolving Credit Termination Date or increase the amount of any payment of principal thereof or increase the rate or shorten any period for payment of interest thereon.
   
Restricted Payments: The Loan Parties may (i) declare and pay dividends or distributions to other Loan Parties, (ii) make Restricted Payments to officers, directors, employees, or other participants pursuant to incentive compensation plans, (iii) declare and pay dividends or distributions with respect to their equity interests solely in additional shares of its equity interests (other than Disqualified Capital Stock) and (iv) following the Initial Scheduled Redetermination, the Loan Parties may make Restricted Payments so long as (A) no Default, Event of Default or Borrowing Base Deficiency has occurred and is continuing or would result therefrom, (B) the Loan Parties’ pro forma Leverage Ratio is less than 2.75 to 1.0 and (C) immediately after giving effect to such payment the Borrower shall have unused availability under the Borrowing Base equal to or greater than fifteen percent (15%) of the Borrowing Base then in effect.

 

Minimum Hedging Agreements:Not later than the 60th day following the Closing Date, Loan Parties shall enter into Swap Agreements with one or more Participating Lenders in respect of commodities the notional volumes for which (when aggregated with other commodity Swap Agreements then in effect other than with respect to puts or floors and basis differential swaps on volumes already hedged pursuant to other Swap Agreements) equal or exceed, as of the date such Swap Agreements are executed, seventy percent (70%) of the reasonably anticipated projected production from proved developed producing reserves evaluated in the Pre-Petition Reserve Report for each month during the period in which such Swap Agreements are in effect for each of crude oil, natural gas and natural gas liquids, calculated separately, for the 18 month period commencing on the date such Swap Agreements are executed; provided, the Borrower may exclude from such calculation the reasonably anticipated projected production from Oil and Gas Properties which are identified in the Credit Documentation at the Closing Date.
  
 The “Existing Credit Agreement” means that certain Second Amended and Restated Credit Agreement dated as of April 26, 2011 (as amended, modified or otherwise supplemented prior to the Closing Date) among EV Energy Partners, L.P., as parent, EV Properties, L.P., as borrower, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents from time to time party thereto.

 

  8 

 

Exhibit C to the Restructuring Support Agreement

 

Form of Transferee Joinder

 

This joinder (this “Joinder”) to the Restructuring Support Agreement (the “Agreement”), dated as of March 13, 2018, by and among: (i) EV Energy Partners, L.P. (“EVEP”), EV Energy GP, LP EV Management LLC, and certain of EVEP’s wholly owned subsidiaries, (ii) the Consenting Noteholders, (iii) the EnerVest Parties, and (iv) the Consenting RBL Lenders, is executed and delivered by [________________] (the “Joining Party”) as of [________________]. Each capitalized term used herein but not otherwise defined shall have the meaning ascribed to it in the Agreement.

 

1.          Agreement to be Bound. The Joining Party hereby agrees to be bound by all of the terms of the Agreement, a copy of which is attached to this Joinder as Annex 1 (as the same has been or may be hereafter amended, restated, or otherwise modified from time to time in accordance with the provisions thereof). The Joining Party shall hereafter be deemed to be a Party for all purposes under the Agreement and one or more of the entities comprising the [Consenting Noteholders/Consenting RBL Lenders/EnerVest Parties].

 

2.          Representations and Warranties. The Joining Party hereby represents and warrants to each other Party to the Agreement that, as of the date hereof, such Joining Party (a) is the legal or beneficial holder of, and has all necessary authority (including authority to bind any other legal or beneficial holder) with respect to, the [Notes Claims/RBL Claims/claims] identified below its name on the signature page hereof, and (b) makes, as of the date hereof, the representations and warranties set forth in Section 18 of the Agreement to each other Party.

 

3.          Governing Law. This Joinder shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to any conflicts of law provisions which would require the application of the law of any other jurisdiction.

 

4.          Notice. All notices and other communications given or made pursuant to the Agreement shall be sent to:

 

To the Joining Party at:

 

[JOINING PARTY]
[ADDRESS]
Attn:
Facsimile: [FAX]
EMAIL:

 

 

 

 

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as of the date first written above.

 

  [JOINING PARTY]
     
  Holdings: $__________________ of [Debt]
    Under the [Indenture/Credit Agreement]

 

 2 

 

Annex 1 to the Form of Transferee Joinder

 

 

 

 

Exhibit 10.2

 

OMNIBUS AGREEMENT EXTENSION

 

This Omnibus Agreement Extension (“Agreement”) is entered into on March 8, 2018, and is by and between EnerVest, Ltd., a Texas limited partnership (“EnerVest”) and EV Energy GP, LP, a Delaware limited partnership (the “General Partner”).

 

WHEREAS, the Omnibus Agreement (the “First Omnibus Agreement”), was entered into on September 29, 2006, by and among EnerVest, EV Management LLC, a Delaware limited liability company (“EV Management”), the General Partner, EV Energy Partners, LP, a Delaware limited partnership (the “Partnership”), and EV Properties, L.P., a Delaware limited partnership (“OLP”). Any capitalized term not defined herein shall have the meaning set forth therein;

 

WHEREAS, pursuant to Section 3.3 of the First Omnibus Agreement, EnerVest and the General Partner determine the amount of general and administrative expenses that will be properly allocated to the Partnership after December 31, 2008;

 

WHEREAS, the First Omnibus Agreement automatically renews each year if it is not terminated by either EnerVest or the General Partner;

 

WHEREAS, the First Omnibus Agreement was extended by the Omnibus Agreement Extensions entered into on December 17, 2008, December 10, 2009, December 21, 2010, December 20, 2011; February 25, 2013, February 15, 2014, February 25, 2015, February 25, 2016, and February 23, 2017;

 

WHEREAS, neither party has terminated the First Omnibus Agreement; and

 

WHEREAS, based on the recommendation of the Conflicts Committee of the Board of Directors of EV Management, which provided Special Approval (as defined in the limited partnership agreement of the Partnership) to the extension of the First Omnibus Agreement as contemplated by this Agreement, the Board of Directors of EV Management has authorized and approved the extension of the First Omnibus Agreement as contemplated by this Agreement.

 

In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, EnerVest and the General Partner hereby agree as follows:

 

1. The First Omnibus Agreement shall continue in effect until December 31, 2018, subject to termination or automatic renewal on such date as provided in the First Omnibus Agreement.

 

1

 

 

2. The Partnership shall pay EnerVest a fee of $1,433,333.33 per month for the services described in the First Omnibus Agreement, subject to adjustment as provided in Section 3.3 therein.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement on, and effective as of, the date above first written.

 

ENERVEST, LTD.
     
By: EnerVest Management GP, L.C.,  
  its general partner  
     
By: /s/JOHN B WALKER  
     John B. Walker  
     Chief Executive Officer  
     
EV ENERGY GP, L.P.
     
By: EV MANAGEMENT, L.L.C.,  
  its general partner  
     
By: /s/NICHOLAS P. BOBROWSKI  
     Nicholas P. Bobrowski  
     Vice President and Chief Financial Officer  

 

2

 

Exhibit 99.1

 

EV ENERGY PARTNERS ANNOUNCES AGREEMENT ON COMPREHENSIVE RESTRUCTURING

 

March 14, 2018

 

HOUSTON, March 14, 2018 (GLOBE NEWSWIRE) — EV Energy Partners, L.P. (NASDAQ: EVEP) and its subsidiaries (collectively, “EVEP” or the “Company”) today announced that the Company entered into a restructuring support agreement (“RSA”) with certain holders of approximately 70% of its 8.0% senior notes due 2019 (the “Senior Notes”) and lenders holding approximately 94% of the principal amount outstanding under the Company’s reserve-based lending facility on March 13, 2018. The RSA was also signed by EnerVest, Ltd. (“EnerVest”) and EnerVest Operating, L.L.C. (“EnerVest Operating”) as they will continue to provide services to the Company.

 

The RSA contemplates a comprehensive restructuring of the Company’s capital structure, to be implemented through a proposed pre-packaged plan of reorganization (the “Plan”) that will significantly deleverage the Company’s balance sheet. Consistent with the RSA, the Company will commence the solicitation of votes to accept or reject the Plan today and commence its prepackaged bankruptcy case in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on or before April 8, 2018. Neither EnerVest nor EnerVest Operating is seeking Chapter 11 bankruptcy relief.

 

More specifically, the Plan, which is subject to confirmation by the Bankruptcy Court, contemplates the equitization of all of the Company’s Senior Notes and the entry into an amended reserve-based lending facility with the Company’s existing lenders. Additionally, the Plan contemplates that suppliers, customers and other holders of general unsecured claims will be paid in full in the ordinary course of business and otherwise be unimpaired. The Company does not plan to reject any of its existing contracts as part of the restructuring.

 

The Company expects EnerVest Operating to continue as the primary operator for its oil and natural gas properties in the Barnett Shale, San Juan Basin, Appalachian Basin, Michigan, Central Texas, Permian Basin, Monroe Field and Karnes County, TX.

 

“We believe that this provides the best path forward for our Company to reduce leverage, maintain access to liquidity and maximize value for all of our stakeholders. During the restructuring and upon emergence, we expect to have ample liquidity and do not anticipate the need for debtor-in-possession financing or other additional capital,” said Michael Mercer, President and CEO.

 

Upon consummation, the restructuring would, among other things:

 

·Amend the Company’s reserve-based lending facility;

 

·Eliminate more than $343 million of principal and accrued interest with respect to the Senior Notes, in exchange for 95% of the reorganized Company’s equity as of the effective date of the Plan (subject to dilution by a management incentive plan and warrants for existing unit holders);

 

·Pay all supplier, service provider, customer, employee, royalty and working interest obligations in full in the ordinary course; and

 

·Provide the Company’s existing unitholders with consideration in the form of 5% of the reorganized Company’s equity (subject to dilution by a management incentive plan and warrants for existing unitholders) and 5-year warrants to acquire up to 8% of the equity in the reorganized Company.

 

The Company’s existing unitholders may be allocated taxable income and loss in connection with the restructuring, including cancellation of indebtedness income (“CODI”), if any, that could result from the court-supervised reorganization process. In general, CODI will be allocated to persons who are deemed to hold the units when the events giving rise to such CODI occur. The Company’s existing unitholders are not eligible to vote on the Plan but are encouraged to refer to the RSA and the Disclosure Statement for additional information, which is included with the Form 8-K filed with the Securities and Exchange Commission today.

 

   

 

 

The Company intends to commence solicitation on the Plan today. Votes on the Plan must be received by Prime Clerk, LLC, the Company’s voting agent, by March 30, 2018, unless the deadline is extended. The record date for voting has been set as March 12, 2018. Subject to approval by EVEP’s board of directors, the Company anticipates filing voluntary petitions for relief under chapter 11 in the Bankruptcy Court by April 8, 2018. Subject to Bankruptcy Court approval of the Plan and the satisfaction of certain conditions to the Plan and related transactions, the Company expects to consummate the Plan and emerge from chapter 11 before the end of the second quarter of 2018. There can be no assurances that the Plan will be approved or confirmed by the Bankruptcy Court, by that time, or at all.

 

This press release is for information purposes only and is not intended to be, and should not in any way be construed as, a solicitation of votes of noteholders or other investors regarding the Plan, and shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of any such state. Any securities to be issued pursuant to the Plan will not be or have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Any solicitation or offer to sell will be made pursuant to and in accordance with the Disclosure Statement distributed to holders of the Company’s outstanding Senior Notes and lenders under the Company’s reserve-based lending facility and applicable law.

 

More detailed information on the restructuring can be found in the RSA and Disclosure Statement which is included with the Form 8-K filed with the Securities and Exchange Commission today. Further information on the Company as well as the restructuring process and plan will be included in a disclosure document which will be used in the solicitation process.

 

Advisors

 

Kirkland & Ellis LLP is acting as legal counsel and Perella Weinberg Partners LP is acting as financial advisor to the Company in connection with its restructuring efforts. Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel, and Intrepid Partners LLC is acting as financial advisor to the noteholders party to the RSA. Simpson Thacher & Bartlett LLP is acting as legal counsel and RPA Advisors, LLC is acting as financial advisor to the lenders party to the RSA.

 

About EV Energy Partners, L.P.

 

EV Energy Partners, L.P. is a master limited partnership engaged in acquiring, producing and developing oil and natural gas properties. More information about EVEP is available on the internet at http://www.evenergypartners.com.

 

Forward Looking Statements

 

This press release contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that EVEP expects, believes or anticipates will or may occur in the future are forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in our most recent Annual Report on Form 10-K for the year ended December 31, 2016, as well as in other reports filed from time to time by EVEP with the Securities and Exchange Commission, most of which are beyond our control. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. Although we believe that the forward-looking statements contained in this press release are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

 

 2 

 

 

Any forward-looking statement speaks only as of the date on which such statement is made and EVEP undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

 

These forward-looking statements relate, in part, to (i) EVEP’s ability to obtain approval by the Bankruptcy Court of the Plan or any other plan of reorganization, including the treatment of the claims of EVEP’s lenders and trade creditors, among others; (ii) EVEP’s ability to obtain approval with respect to motions in the chapter 11 cases and the Bankruptcy Court’s rulings in the chapter 11 cases and the outcome of the chapter 11 cases in general; (iii) the length of time the Debtors will operate under the chapter 11 cases; (iv) risks associated with third-party motions in the chapter 11 cases, which may interfere with the Debtors’ ability to develop and consummate the Plan or other plan of reorganization; (v) the potential adverse effects of the chapter 11 cases on the Debtors’ liquidity, results of operations or business prospects; (vi) the ability to execute EVEP’s business and restructuring plan; (vii) increased legal and advisor costs related to the chapter 11 cases and other litigation and the inherent risks involved in a bankruptcy process; and (viii) other factors disclosed by EVEP from time to time in its filings with the SEC, including those described under the caption “Risk Factors” in EVEP’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law.

 

EV Energy Partners, L.P., Houston

 

Nicholas Bobrowski

713-651-1144

http://www.evenergypartners.com

 

 3 

Exhibit 99.2

 

 

EV Energy Partners, L.P. Management Presentation November 2017

 

 

Forward - Looking Statements Statements made in this presentation that are not historical facts are “forward - looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements include information future plans, our reserve quantities and the present value of our reserves, estimates of maintenance capital and other statements which include words such as “anticipates,” “plans,” “projects,” “expects,” “intends,” “believes,” ”should,” and similar expressions of forward - looking information. Forward - looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of EV Energy Partners, L.P. These statements are based on certain assumptions made by EV Energy Partners based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Actual results may differ materially from those discussed in this presentation. Such risks and uncertainties include, but are not limited to, changes in commodity prices, changes in reserve estimates, requirements and actions of purchasers of properties (including the Utica Shale and Eagle Ford assets), exploration and development activities, the availability and cost of financing, the returns on our capital investments and acquisition strategies, the availability of sufficient cash flow to pay distributions and execute our business plan and general economic conditions. Additional information on risks and uncertainties that could affect our business prospects and performance are provided in the most recent reports of EV Energy Partners with the Securities and Exchange Commission. You are cautioned not to place undue reliance - on these forward - looking statements, which speak only as of the date of this presentation. All forward - looking statements included in this presentation are expressly qualified in their entirety by the foregoing cautionary statements. Any forward - looking statement speaks only as of November 17, 2017, the date on which such statement was made and EVEP undertakes no obligation to correct or update any forward - looking statement, whether as a result of new information, future events or otherwise. 2

 

 

Non - GAAP Measures The Company has presented Adjusted EBITDAX and PV - 10 which are non - GAAP financial measures. The Company believes that this presentation provides useful information to management, analysts and investors regarding certain additional trends relating to the results of operations and financial condition of the Company. These non - GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by GAAP. You should not consider these non - GAAP financial measures in isolation or as a substitute for analysis of the Company’s results as reported under GAAP . 3

 

 

Table of Contents I. Executive Summary II. Asset Overviews A. Barnett Shale B. Austin Chalk C. Karnes County D. Appalachian Basin & Michigan E. San Juan Basin F. Mid - Continent & Other Operating Areas III. Financial Overview Appendix 4

 

 

I. Executive Summary

 

 

EVEP Overview ▶ Upstream MLP created in September 2006 ♦ Long - lived, diverse asset base with Q3 YTD daily production of 171 Mmcfe /d ▪ Barnett Shale: 55.4 Mmcfe /d, Appalachia Basin: 37.1 Mmcfe /d, San Juan Basin: 21.8 Mmcfe /d ▶ Experienced General Partner (GP) Ownership ♦ EnerVest & Management (76.25 %) ▪ EnerVest established in 1992 ♦ EnCap (23.75 %) ▪ EnCap established in 1988 ▶ 49.1 million outstanding units ♦ EVEP / EnerVest management and Board own over 10% 6

 

 

Management Team 7 John Walker Executive Chairman ▪ Served as Executive Chairman since January 2012 and has been a director since 2006 ▪ Prior to serving as Executive Chairman, served as Chairman and Chief Executive Officer since 2006 ▪ Mr. Walker also serves as the Chief Executive Officer of EnerVest , Ltd. from its inception in 1992, and was the President of EnerVest , Ltd. from its formation in 1992 until 2014 ▪ Prior to that, Mr. Walker was President & COO of Torch Energy Advisors and CEO of Walker Energy Partners ▪ Holds a BBA with Honors from Texas Tech University and an MBA (with distinction) from New York University Michael E. Mercer President & CEO ▪ Served as President and Chief Executive Officer since March 2015 ▪ Prior to that, served as Senior Vice President and Chief Financial Officer since 2006 and as a consultant to EnerVest , Ltd. from 2001 to 2006 ▪ Prior to that, Mr. Mercer was an investment banker for 12 years ▪ Holds a BBA in Petroleum Land Management from the University of Texas at Austin and an MBA from the University of Chicago Booth School of Business Nicholas Bobrowski Vice President & CFO ▪ Served as Vice President and Chief Financial Officer since March 2015 ▪ Prior to that, served as Director of Finance of EV Management and an energy investment banker with Citigroup Global Markets ▪ Prior to that, rose to the rank of Captain in the 25th Infantry Division of the United States Army ▪ Holds a BS in Economics from the United States Military Academy at West Point and an MBA from the Sloan School of Management at MIT Terry Wagstaff VP Acq . & Engineering ▪ Served as Vice President of Acquisitions and Engineering since April 2014 ▪ Prior to that, served as Senior Technical Advisor - Acquisitions and Engineering for the Institutional business of EnerVest , Ltd., since October 2008 ▪ Prior to joining EnerVest worked for El Paso in a variety of engineering roles ▪ Holds a BS in Petroleum Engineering from Texas A&M University and a MBA from Rice University

 

 

EnerVest / EVEP Organizational Chart 8 EnerVest Op Co. EnerVest Institutional Funds EVEP Barnett North Appalachia Rockies / Permian Austin Chalk Mid - Continent Karnes County Louisiana South Appalachia Fund IX Fund X Fund XI Fund XII Fund XIII Fund XIV A B EVEP Omnibus Agreement governs EVEP funding of its share of EnerVest G&A Joint Operating Agreements govern operations at the asset level FUND IX FUND X FUND XI FUND XII FUND XIII FUND XIV Barnett Shale – – x x x – Appalachia North – – x – – – Rockies/Permian – – x – – – Austin Chalk – x x – – – Greater MidCon – – – – – – Karnes County – – – – – x Louisiana – – – – – – South Appalachia x x x – – – A B B ▶ Corporate team comprised of 62 engineers, 26 geologists, 86 land and 96 accounting and finance ♦ 7 of which are EVEP employees

 

 

Largest operating company in United States • 40,000 wells in 15 states (83% operated) • 11 Tcfe 2P Reserves (71% natural gas) • 6.5 million acres • 1,221 employees • 2 Corporate Offices • 27 District Offices • 5 asset regions Houston ( headquarters ) Legend EnerVest Offices 64% 17% 19% Natural Gas Oil NGLs Production Mix ~1 Bcfe /d (~ 75% Unconventional) Rockies & Permian North Texas & Greater MidCon Eagle Ford & Austin Chalk Appalachia North Appalachia South 9 EnerVest Overview Note: Inclusive of EVEP EnerVest operates over 90% of EVEP’s assets

 

 

Building EVEP: 7 Years of Growth Through Acquisition 2006 2013 Sep 2006 • IPO with 51 Bcfe 1 P Reserves 2007 • Acquired 267 Bcfe 1P Reserves in Austin Chalk, Michigan , Monroe Field, Permian, and West Virginia 2008 • Acquired 99 Bcfe 1 P Reserves primarily in the San Juan Basin, Mid - Con , and Charlotte Field 2009 • Acquired 23 Bcfe 1 P Reserves in Appalachia and the Austin Chalk 2010 • Acquired 476 Bcfe 1 P Reserves in Barnett Shale, Appalachia, and the Mid - Con 2011 • Acquired 422 Bcfe 1 P Reserves in Barnett Shale 2012 • Initial Investment into Utica midstream p artnerships 2013 • Acquired 62 Bcfe 1 P Reserves in Barnett Shale • Partial monetization of Utica acreage ($46MM) • Continued buildout of Utica midstream partnerships 62 329 359 366 817 1,144 905 1,192 2006 2007 2008 2009 2010 2011 2012 2013 YE SEC Reserves (Bcfe) 10 Note: Proved reserves based on estimated proved reserves at the time of acquisition announcement

 

 

Note: Proved reserves based on estimated proved reserves at the time of acquisition announcement Actions Taken To Address Decline in Commodity Prices 2014 Q3 2017 2014 • Continued buildout of Utica midstream partnerships • Monetized Utica gathering partnership interest ($161MM, >2.3x invested capital) • Partial monetization of Eagle Ford formation rights ($34MM) 2015 • Reduced distribution by 35% • Monetized Utica processing and fractionation partnership interest ($575MM, 2x invested capital) • Acquired 302 Bcfe 1P Reserves in San Juan Basin, Austin Chalk, Appalachia and Michigan • Repurchased $74MM of senior notes for $50MM (68% of par) 2016 • Suspended distribution • Eased bank covenants until 2018 • Repurchased $83MM of senior notes for $35MM (42% of par) Q1 2017 • Completed asset swap by divesting 95 Bcfe of low margin Barnett Shale natural gas 1P reserves and acquiring 6.4 Mmboe of high margin Karnes County Eagle Ford and Austin Chalk 1P Reserves Current Status • Elevated leverage • Maturity of Senior Notes in 2019 • Borrowing base re - determined to $325MM 11

 

 

EVEP Today: Long - lived , Diverse Asset Base Total Proved Reserves: 1.2 T cfe 1 Percent Developed: 76% Percent Natural Gas: 65% Reserve - Life Index: 18.6 years 2 Austin Chalk Proved Reserves: 63 Bcfe Q3 YTD Production: 14.0 Mmcfe /d Michigan Proved Reserves: 91 Bcfe Q3 YTD Production: 14.1 Mmcfe /d Mid - Continent Proved Reserves: 41 Bcfe Q3 YTD Production: 14.1 Mmcfe /d San Juan Basin Proved Reserves: 195 Bcfe Q3 YTD Production: 21.8 Mmcfe /d Permian Basin Proved Reserves: 25 Bcfe Q3 YTD Production: 3.9 Mmcfe /d Monroe Field Proved Reserves: 32 Bcfe Q3 YTD Production: 4.5 Mmcfe /d Appalachian Basin Proved Reserves: 207 Bcfe Q3 YTD Production: 37.1 Mmcfe /d Barnett Shale Proved Reserves: 471 Bcfe Q3 YTD Production: 55.4 Mmcfe /d (1) Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017. (2) Based on Q3 YTD production of 170.7 M mcfe /d. (3) Since acquisition on January 31, 2017. Karnes County Acquisition Est. Proved Reserves: 34 Bcfe Q3 YTD Production 3 : 5.8 Mmcfe /d 12

 

 

Mid - Year EVEP Reserve Summary ▶ 1P based on finalized mid - year 2017 reserves 13 Proved Reserves by ResCat 1P Reserves by Area Proved Reserves by Hydrocarbon Reserves Summary (1) Oil 12% Gas 65% NGL 23% Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017. Other includes Monr oe, Mid - Con, and Permian assets. Please refer to slide 3 for a statement on non - GAAP measures. (1) Reserves summary assumes uneconomic wells do not produce (“Loss No in ARIES”) ($ in millions) PDP 51% PDNP 2% PUD 17% PROB 8% POSS 22% Barnett 41% Austin Chalk 5% Karnes County 3% Appalachia 18% San Juan 17% Michigan 8% Other 8% 1P Reserves PV-10 Oil (MMBBL) Gas (BCF) NGL (MMBBL) Total (BCFE) % Gas PDP PDNP PUD 1P 3P Barnett 1 311 26 471 66% $207 $6 $16 $228 $239 Austin Chalk 3 26 3 63 42% 59 0 8 67 70 Karnes County 4 6 1 34 19% 15 6 50 71 109 Appalachia 11 132 1 207 63% 152 2 8 162 201 San Juan 2 126 10 195 65% 92 6 3 102 102 Michigan 0 88 0 91 97% 48 0 - 48 48 Other 2 68 3 97 70% 60 3 1 64 65 Total 22 757 45 1,159 65% $632 $23 $87 $742 $833

 

 

$207 $247 $228 $284 $239 $303 $239 $303 $15 $19 $71 $105 $85 $126 $109 $163 $59 $79 $67 $99 $69 $102 $70 $104 $152 $216 $162 $280 $165 $292 $201 $404 $92 $114 $102 $130 $102 $130 $102 $130 $48 $62 $48 $63 $48 $63 $48 $63 $60 $86 $64 $92 $65 $94 $65 $97 $632 $823 $742 $1,053 $773 $1,110 $833 $1,264 NYMEX Strip $65 WTI / $3.50 Henry Hub NYMEX Strip $65 WTI / $3.50 Henry Hub NYMEX Strip $65 WTI / $3.50 Henry Hub NYMEX Strip $65 WTI / $3.50 Henry Hub PDP Total 1P Total 2P Total 3P Barnett Karnes County Austin Chalk Appalachia San Juan Michigan Other Mid - Year EVEP Reserve Summary (Cont’d) 14 ($ in millions) EVEP PV - 10 as of June 30, 2017 Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017.

 

 

10/31/2017 NYMEX Strip Pricing 15 MY2017 FINAL Reserve Price Data NYMEX Forward Strip Pricing as of 10/31/2017 Institutional Pricing: IC10 Year Oil, $/bbl Gas, $/mmbtu 2017 54.38 2.90 2018 54.08 2.95 2019 51.79 2.90 2020 50.56 2.87 2021 50.09 2.88 2022 50.18 2.90 2023 50.79 2.96 2024 51.33 3.03 2025 51.93 3.11 2026 51.93 3.19 2027 51.93 3.27 2028 51.93 3.35 Thereafter 51.930 3.45

 

 

Area PDNP PUD PROB POSS Total Barnett Shale 19 184 179 - 382 Austin Chalk 2 89 21 13 125 Karnes County 18 160 39 124 341 Appalachia 2 54 79 74 987 1,194 Other 50 51 25 25 151 Total 143 563 338 1149 2193 Overview of Undeveloped Inventory as of 6/30/17 (NYMEX Strip) 16 Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017 . (1) At a 10% discount rate (2) Includes Michigan EVEP Drilling Schedule ▶ More than 700 1P and 1000 2P gross upside locations economic at strip 1 ♦ 178 1P locations associated with the Karnes County acquisition 32 13 29 17 17 6 9 2 2 33 93 130 60 59 56 45 25 30 11 8 28 24 27 34 71 81 15 32 9 2 20 13 48 58 30 210 251 180 151 50 75 154 196 152 168 163 345 293 244 171 50 50 100 150 200 250 300 350 PDNP PUD PROB POSS

 

 

Current Undeveloped Inventory as of 6/30/17 17 ▶ More than 700 1P and 1000 2P gross upside locations economic at strip 1 ♦ 178 1P locations associated with the Karnes County acquisition ($ in thousands) NYMEX Strip PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR 23 $247 336 $26,292 191 $8,725 1,011 $35,603 20% - 30% IRR 25 1,821 38 4,318 28 4,156 36 1,683 30% - 40% IRR 7 2,087 19 2,612 3 1,172 13 510 40%+ IRR 88 19,302 170 53,437 116 16,347 89 22,826 Total 143 $23,458 563 $86,659 338 $30,399 1,149 $60,621 $65 WTI / $3.50 Henry Hub PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR 27 $431 331 $21,505 240 $8,969 246 $6,641 20% - 30% IRR 18 464 233 72,770 50 8,292 127 5,508 30% - 40% IRR 13 2,003 45 13,999 66 12,106 540 71,543 40%+ IRR 101 28,905 230 89,436 140 27,920 469 70,219 Total 159 $31,804 839 $197,712 496 $57,287 1,382 $153,911 Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017 . (1) At a 10% discount rate

 

 

Note: Strip pricing as of October 31, 2017. Forecasts based on mid - year reserve report with 3 year Loss OK. Summary Reserve Report Based Forecast Production by ResCat ( M mcfe /d ) Production by Basin ( M mcfe /d ) Capex by Basin ($MM) EBITDA ($MM) 18 159 151 139 126 114 107 7 4 5 6 7 6 5 15 34 39 41 45 1 4 6 9 11 19 4 5 8 12 12 173 178 190 187 185 188 FY Q4'17E FY2018E FY2019E FY2020E FY2021E FY2022E PDP PDNP PUD PROB POSS 8 % Annualized PDP Decline (’18 – ’22) $83 $119 $140 $142 $142 $142 FY2017E FY2018E FY2019E FY2020E FY2021E FY2022E $4 $30 $33 $23 $29 $29 $4 $10 $10 $6 $5 $8 $7 $11 $14 $12 $25 $42 $2 $16 $18 $16 $13 $4 $2 $1 $11 $9 $11 $10 $19 $69 $87 $66 $82 $93 FY Q4'17E FY2018E FY2019E FY2020E FY2021E FY2022E Appalachia Austin Chalk Barnett Karnes County Other 48 53 57 55 52 52 14 14 16 15 13 14 60 59 57 56 61 68 10 13 19 21 20 16 41 40 41 40 39 38 173 178 190 187 185 188 FY Q4'17E FY2018E FY2019E FY2020E FY2021E FY2022E Appalachia Austin Chalk Barnett Karnes County Other

 

 

II. Asset Overviews

 

 

A. Barnett Shale

 

 

Land Summary Gross Acres EVEP Net Acres Upside Locations 1 160,732 41,557 382 (1) Upside locations include PDNP, PUD and PROB Barnett Shale 21 ▶ M id - year 2017 1P reserves : 471 Bcfe ♦ 66% natural gas, 33% NGL, 1% crude oil ♦ NYMEX PV - 10 of $228MM (90.4% PDP) ▶ Q3 YTD production : 55.4 Mmcfe /d ▶ EVEP plans to spend $14 – 16MM in 2017 ♦ 1 rig began in April ♦ 11 well program plus 1 DUC ▶ ~28% working interest and ~21 % net revenue interest in wells ▶ Top 3 non - op operators: Bluestone, Devon, EOG EVEP WI Acreage Dry Gas Wet Gas Oil

 

 

Barnett Shale Highlights WI (PDP Avg): ~28% %PDP / %PD (based on reserves) : 55% / 57% Operated 1 : 99% (PDP PV10) Total Acreage: 160,732 gross / 41,557 net acres Reservoirs: Barnett Shale Reservoir Depths: 6,500’ - 8,500’ Gross Wells (as of 6/30/17): 1,083 PDP, 19 PDNP, 184 PUD, 179 PROB Proved Reserves (net to EVEP) : 471.3 Bcfe 1% Crude / 66% Gas / 33% NGL 2P Reserves (net to EVEP) : 564.1 Bcfe 1% Crude / 66% Gas / 33% NGL Q3 YTD Production (net to EVEP) : 55.4 Mmcfe /d 2017E CAPEX (net to EVEP) : $14 - $16 million forecast 22 (1) EVOC acts as operator.

 

 

23 Overview of Barnett Shale Undeveloped Inventory as of 6/30/17 Barnett Shale Upside Schedule Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017. 6 1 4 4 4 6 2 12 12 25 35 21 16 24 10 3 10 4 5 9 27 71 9 26 8 15 13 20 21 38 62 92 25 50 18 0 25 50 75 100 PDNP PUD PROB POSS

 

 

NYMEX Strip PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR - $- 170 $12,418 114 $5,966 - $- 20% - 30% IRR 3 309 11 2,327 14 3,298 - - 30% - 40% IRR 5 1,532 3 1,390 3 1,172 - - 40%+ IRR 11 3,928 - - 48 56 - - Total 19 $5,769 184 $16,135 179 $10,491 - $- $65 WTI / $3.50 Henry Hub PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR - $- 197 $10,549 131 $7,761 - $- 20% - 30% IRR - - 70 15,931 29 6,093 - - 30% - 40% IRR 1 139 3 1,055 11 3,514 - - 40%+ IRR 19 7,602 3 1,802 52 1,918 - - Total 20 $7,742 273 $29,337 223 $19,287 - $- Current Undeveloped Inventory as of 6/30/17 (Barnett Shale) 24 ($ in thousands)

 

 

B. Austin Chalk

 

 

Austin Chalk 26 ▶ Mid - year 2017 1P reserves: 63 Bcfe ♦ 42% natural gas, 29% NGLs, 29% crude oil ♦ NYMEX PV - 10 of $67MM (88.0% PDP) ▶ Q3 YTD Production: 14.0 Mmcfe /d ▶ Plans to spend $4 – 8 MM ♦ 1 rig began in June ♦ 4 to 5 well program ♦ ~17% working interest and ~13% net revenue interest in wells ♦ Recently acquired 10,000 gross (4,000 net) acres prospective for both Austin Chalk and Eagle Ford formations in Washington and Fayette counties 2 ▶ Eagle Ford upside in Lee, Fayette, Washington, and Austin counties ▶ Does not have Eagle Ford upside in Grimes, Burleson and Brazos counties ▶ Top 3 non - op operators: US Operating, WCS O&G, Geosouthern Energy EVEP Working Interest Acreage EVEP Wells (1) Upside locations include PDNP, PUD and PROB. (2) Acquired a 40% working interest on August 1, 2017 for $2.8MM; not included in mid - year reserves. Land Summary Gross Acres EVEP Net Acres Upside Locations 1 862,372 145,627 132

 

 

Austin Chalk Highlights WI (PDP Avg): ~17% %PDP / %PD (based on reserves) : 59% / 59% Operated 1 : 96% (PDP PV10) Total Acreage: 862,372 gross / 145,627 net acres Reservoirs: Austin Chalk, Eagle Ford (Lee, Fayette, Washington Counties) Reservoir Depths: 7,000’ – 13,000’ Gross Wells (as of 6/30/17): 1,140 PDP, 2 PDNP, 89 PUD, 21 PROB, 13 POSS Proved Reserves (net to EVEP) : 62.6 Bcfe 29% Crude / 42% Gas / 29% NGL 2P Reserves (net to EVEP) : 67.7 Bcfe 28% Crude / 43% Gas / 29% NGL Q3 YTD Production (net to EVEP) : 14.0 Mmcfe /d 2017E CAPEX (net to EVEP) : $4 - $8 million forecast 27 (1) EVOC acts as operator.

 

 

Recent Austin Chalk Well Results ▶ Impressive initial results from recent Austin Chalk well (Neva #2) in Washington County ♦ Started flowback Sep 20th with 24 - hour initial production (IP) tested at 2,529 boe /d (45% NGLs, 29% oil and 26% gas ) ♦ Due to pipeline constraints, well was choked back, but 30 - day IP was 1,556 boe /d (27% NGLs, 19% oil and 54% gas) ♦ EVEP has a 15% WI ▶ Used enhanced completion designs with a cemented liner ♦ 4,700’ lateral with 26 stages, 180’ spacing and 2,800 lb / ft proppant loading ♦ $ 8.05mm D&C costs ♦ First well drilled in this area since 2015 ▶ Completion communication stimulated older vintage well directly above to 2 mmcf /d and 200 bbl /d (3.2 mmcfe /d) of production ▶ Additional well starting flowback with two more expected Q1’18 28 Producing Nov ‘17 1Q18 Northwest Washington County, TX Neva Flowback

 

 

29 Overview of Austin Chalk Undeveloped Inventory as of 6/30/17 Austin Chalk Well Schedule Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017. Does not include August 1, 2017 acquisition. 2 5 8 12 14 9 9 16 9 6 1 1 1 7 4 2 2 4 3 9 1 5 11 13 14 19 22 18 12 10 1 0 10 20 30 40 PDNP PUD PROB POSS

 

 

NYMEX Strip PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR - $- 52 $2,153 11 $387 6 $214 20% - 30% IRR 1 43 18 1,414 3 183 3 123 30% - 40% IRR - - 3 352 - - 2 70 40%+ IRR 1 300 16 3,815 7 1,252 2 151 Total 2 $344 89 $7,734 21 $1,821 13 $559 $65 WTI / $3.50 Henry Hub PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR 1 $1 20 $1,640 9 $231 2 $45 20% - 30% IRR - - 41 6,111 6 958 5 440 30% - 40% IRR - - 9 1,996 2 156 1 141 40%+ IRR 2 652 38 9,100 11 2,232 7 537 Total 3 $654 108 $18,847 28 $3,577 15 $1,162 Current Undeveloped Inventory as of 6/30/17 (Austin Chalk) 30 ($ in thousands) Note: Does not include August 1, 2017 acquisition.

 

 

C. Karnes County

 

 

Karnes County Acquisition Prospective for both the Eagle Ford and Austin Chalk 32 ▶ Closed January 31, 2017 ▶ ~5% working interest and 4% NRI in 9,151 gross (529 net) acres ♦ EnerVest owns 87% WI and acts as operator ▶ Mid - year 1P 2017 r eserves : 34 Bcfe ♦ 66% crude oil, 19% natural gas, 15% NGLs ♦ NYMEX PV - 10 of $71MM (20.9% PDP) ▶ Q3 YTD production 1 : 5.8 Mmcfe /d ▶ Over 170 economic, scalable, repeatable proved and probable drilling locations at recent strip prices ▶ Significant Austin Chalk upside ▶ Plans to spend $ 9 – 14MM to drill and complete 35+ wells ♦ 2 rigs currently running EVEP Working Interest Acreage Karnes Wilson (1) Since acquisition on January 31, 2017.

 

 

WI (PDP Avg): ~5% %PDP / %PD (based on reserves): 9% / 13% Operated 1 : 95% (PDP PV10) Total Acreage: 9,151 gross / 529 net acres (72% HBP) Reservoirs: Lower Eagle Ford, Upper Eagle Ford, Austin Chalk Reservoir Depths: 9,500’ - 11,000’ Gross Wells (as of 6/30/17): 57 PDP, 18 PDNP, 160 PUD, 39 PROB, 124 POSS Proved Reserves (net to EVEP) : 5.7 MMboe or 34.1 Bcfe 66% Crude / 19% Gas / 15% NGL 2P Reserves (net to EVEP) : 7.0 MMboe or 42.3 Bcfe 64% Crude / 20% Gas / 16% NGL Q3 YTD Production (net to EVEP) : 5.8 Mmcfe /d 2017E CAPEX (net to EVEP) : $9 - $14 million forecast Karnes County Highlights 33 (1) EVOC acts as operator.

 

 

34 ▶ Yanta pad in Karnes County began flowback Sep 11 th with initial production of 4.4 mbbl /d of oil and 7.2 mmcf /d of natural gas (5.6 mboe /d) ♦ 2 well pad targeting the Austin Chalk ♦ EVEP has a 5.8% WI ▶ Brought on an additional 10 wells on 3 pads in Sep ♦ Spot production tested as high as 18.9 mbbl /d of oil and 18.9 mmcf /d of natural gas and (22.1 mboe /d) ♦ Targeted both the lower Eagle Ford (6 wells) and Austin Chalk (4 wells) formations ♦ EVEP has a 3 – 5.8% WI ▶ Expect to begin flow back on 13 additional Karnes County wells before year end ♦ Will target both the lower Eagle Ford (7 wells) and Austin Chalk (6 wells) ♦ EVEP has a 5.8% WI Karnes County Assets Recent Chalk & Eagle Ford Results

 

 

18 22 52 63 15 4 4 3 6 11 12 7 1 11 2 43 47 20 44 69 76 70 58 24 0 0 0 0 0 10 20 30 40 50 60 70 80 PDNP PUD PROB POSS 35 Overview of Karnes County Undeveloped Inventory as of 6/30/17 Karnes County Well Schedule Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017.

 

 

NYMEX Strip PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR - $- 2 $9 2 $19 22 $120 20% - 30% IRR - - 8 327 - - 17 756 30% - 40% IRR - - 10 564 - - 8 235 40%+ IRR 18 6,459 140 49,019 37 14,069 77 22,586 Total 18 $6,459 160 $49,919 39 $14,087 124 $23,697 $65 WTI / $3.50 Henry Hub PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR - $- - $- - $- - $- 20% - 30% IRR - - 36 686 - - 24 429 30% - 40% IRR - - - - - - 2 67 40%+ IRR 18 8,755 168 76,263 39 20,661 140 37,342 Total 18 $8,755 204 $76,950 39 $20,661 166 $37,837 Current Undeveloped Inventory as of 6/30/17 (Karnes County) 36 ($ in thousands)

 

 

D. Appalachian Basin & Michigan

 

 

Appalachian Basin & Michigan 38 Appalachian Basin ▶ Mid - year 2017 1P reserves: 207 Bcfe ♦ 63% natural gas, 33% crude oil, 4% NGLs ♦ NYMEX PV - 10 of $162MM (93.8% PDP) ▶ Q3 YTD production: 37.1 Mmcfe /d ▶ ~76% working interest and ~67% net revenue interest in wells ▶ Clinton horizontal drilling upside – currently drilling first well using enhanced completion design ▶ Utica acreage upside ▶ Top 3 non - op operators: Kastle Resources, Atlas Noble, Bass Energy Michigan ▶ Mid - year 2017 1P reserves: 91 Bcfe ♦ 97% natural gas and 3% NGLs/crude ♦ NYMEX PV - 10 of $48MM (99.3% PDP) ▶ Q3 YTD production : 14.1 Mmcfe /d ▶ ~68% working interest and ~55% net revenue interest in wells ▶ Top 3 non - op operators: Terra Energy, Riverside, Quicksilver Resources EVEP Working Interest Acreage

 

 

EVEP Utica Acreage Position Non - o perated Acreage Operated Acreage OH WV PA EVEP Ut ica Net Acreage Formation Acreage % of Total Dry Gas 10,902 10% Wet Gas 17,678 17% Volatile Oil 77,658 73% Total 106,238 100% OIL VOLATILE WET DRY 39 ▶ Over 106,000 net working interest acres ♦ Acreage primarily HBP with EVEP controlling the surface production ♦ Over 500 wells drilled in and around our position – mostly in wet gas window ♦ Top 3 non - op operators : Chesapeake, Hilcorp , Eclipse Resources ▶ Overriding royalty interests on 880,000 gross acres ♦ Approximately 2% average ORRI

 

 

Clinton Horizontal Opportunity ▶ The East Canton Oil Field (ECOF) was discovered in 1947 and has 3,150 active conventional wells ♦ Estimated to have substantial remaining oil reserves in place ♦ Very little unconventional drilling – last well was 2015 ▶ EVEP owns 115,000 operated acres (gross) ♦ Working interest on this acreage is typically >90% ♦ Able to add to this acreage position as there is little current activity in the area ▶ Currently drilling the Stark Brick #13 - H during 4Q17 ♦ Targets the White Clinton Sandstone, which is relatively shallow ♦ Employs enhanced plug and perf completion design with six stages and four clusters per stage ♦ D&C costs estimated to be $3.0 - $3.4mm ▶ If test well is successful, acreage position allows for significant expansion of drilling ♦ 210 identified locations, which can be substantially increased by working with state regulators on setback requirements 40 Northern ECOF Central ECOF Southern ECOF Drilled Inventory EVEP Acreage Stark Brick Unit #13 - H) East Canton Oil Field

 

 

41 Overview of Appalachia Undeveloped Inventory as of 6/30/17 Appalachia Well Schedule 7 4 5 6 6 4 8 1 22 27 13 13 2 2 4 3 8 8 40 7 2 2 3 5 5 5 210 247 179 151 50 7 33 40 32 32 46 227 250 181 151 50 50 100 150 200 250 PDNP PUD PROB POSS ▶ Clinton Horizontal opportunity locations are included, however their PV - 10 value is not reflective of potential enhanced well design Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017; i ncludes Michigan.

 

 

Current Undeveloped Inventory as of 6/30/17 (Appalachia) 42 ($ in thousands) NYMEX Strip PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR 17 $172 79 $8,464 61 $2,342 973 $35,144 20% - 30% IRR 10 168 - - 9 250 14 788 30% - 40% IRR - - - - - - - - 40%+ IRR 27 1,615 - - 4 527 - - Total 54 $1,956 79 $8,464 74 $3,119 987 $35,932 $65 WTI / $3.50 Henry Hub PDNP PUD PROB POSS Locations PV-10 Locations PV-10 Locations PV-10 Locations PV-10 10% - 20% IRR 19 $194 70 $1,605 96 $958 171 $4,675 20% - 30% IRR 18 464 81 50,005 10 1,185 80 4,087 30% - 40% IRR 1 8 33 10,949 53 8,435 537 71,335 40%+ IRR 28 1,968 - - 13 1,428 304 31,694 Total 66 $2,633 184 $62,559 172 $12,007 1,092 $111,790 Note: Mid - year 2017 reserves using NYMEX forward closing prices for oil and natural gas on October 31, 2017; i ncludes Michigan.

 

 

E. San Juan Basin

 

 

San Juan Basin 44 ▶ Mid - year 2017 1P reserves: 195 Bcfe ♦ 65% natural gas, 30% NGLs, 5% crude oil ♦ NYMEX PV - 10 of $102MM (90.9% PDP) ▶ Q3 YTD production : 21.8 Mmcfe /d ▶ ~83% working interest and ~ 69% net revenue interest in wells ▶ Net ~60,000 acres of Mancos/ Gallup formation ▶ Top 3 non - op operators: Benson - Montin - Greer , Samson Resources, Williams Production EVEP Working Interest Acreage (1) Upside locations include PDNP, PUD and PROB Land Summary Gross Acres EVEP Net Acres Upside Locations 1 208,286 104,532 56

 

 

F. Mid - Continent & Other Operating Areas

 

 

Mid - Continent (Non Operated) Counties with EVEP W orking Interest TX OK AR KS MO 46 ▶ Mid - year 2017 1P reserves: 41 Bcfe ♦ 65% natural gas, 25% crude oil, 10% NGLs ♦ NYMEX PV - 10 of $41MM (92.1% PDP) ▶ Q3 YTD production: 14.1 Mmcfe /d ▶ Position composed of small working interests across a number of operators ▶ Deep rights in some locations ▶ Top 3 non - op operators: Citation O&G, Sheridan, Chesapeake (1) Upside locations include PDNP, PUD and PROB Land Summary Gross Acres EVEP Net Acres Upside Locations 1 402,798 57,565 63

 

 

Other Operating Areas Permian ▶ Mid - year 2017 1P reserves: 25 Bcfe ♦ 53% NGLs, 38% natural gas, 9% crude oil ▶ Q3 YTD production: 3.9 Mmcfe /d ▶ Does not have any deep rights ▶ Only non - op partner: Vanguard Monroe ▶ Mid - year 2017 1P reserves: 32 Bcfe ♦ 100% natural gas ▶ Q3 YTD production : 4.5 Mmcfe /d ▶ Operated solely by EnerVest 47

 

 

III. Financial Overview

 

 

Summary Mid - Year Reserve Report Based Financial Projections Key Comments / Assumptions ▶ Projections based on the Loss OK reserve report ▶ NYMEX strip pricing as of October 31, 2017 ▶ 2017 production and capex adjusted for decisions in the field (e.g., workovers) not reflected in the reserve report ▶ Other revenue includes net transportation and ORRI revenue ▶ LOE includes ad valorem taxes, direct operating expenses, and gathering and transportation expenses ▶ G&A estimates based on historical spend 49 Note: Summary Mid - Year Reserve Report Based Financial Projections were prepared based on estimates and projections as of November 17, 2017, and EVEP undertakes no obligation to correct or update any such estimates or projections. (1) Inventory adjustment ($ in millions; except per unit figures) 2017E 2018E 2019E 2020E 2021E 2022E FY FY FY FY FY FY Net Total Production Oil (Mbbl) 1,343 1,666 2,149 2,208 2,078 1,964 Gas (MMcf) 41,747 41,356 42,099 40,913 40,767 41,807 NGL (Mbbl) 2,126 2,261 2,364 2,352 2,375 2,525 Total Net Production (MMcfe) 62,558 64,923 69,178 68,276 67,486 68,742 Net Daily Production Oil (Mbbl/d) 3.7 4.6 5.9 6.0 5.7 5.4 Gas (MMcf/d) 114.4 113.3 115.3 112.1 111.7 114.5 NGL (Mbbl/d) 5.8 6.2 6.5 6.4 6.5 6.9 Total Net Production (MMcfe/d) 171.4 177.9 189.5 187.1 184.9 188.3 Index Pricing WTI $49.84 $54.08 $51.79 $50.56 $50.09 $50.18 HH $3.09 $2.95 $2.90 $2.87 $2.88 $2.90 Realized Pricing Oil $45.98 $49.55 $47.08 $45.98 $45.83 $45.70 Gas $2.70 $2.60 $2.56 $2.54 $2.56 $2.58 NGL (% of Oil) 40% 42% 42% 42% 42% 42% Revenues Oil $61.8 $82.6 $101.2 $101.5 $95.3 $89.7 Gas 112.5 107.7 107.7 103.9 104.6 107.8 NGL 42.3 51.0 51.1 50.4 50.6 53.6 Hedge Gain / (Loss) 0.0 2.6 - - - - Other Revenue Gain / (Loss) 1.7 0.9 8.7 8.7 8.7 8.7 Total Revenue $218.4 $244.7 $268.7 $264.5 $259.1 $259.8 Expenses LOE 101.4 88.2 90.1 84.1 78.2 78.7 Production Taxes 10.2 12.5 13.4 13.5 13.4 13.5 Cash G&A 24.6 25.2 25.2 25.2 25.2 25.2 Non-Cash G&A 5.6 6.7 6.7 6.7 6.7 6.7 Other 1 (0.4) - - - - - Total Expenses $141.4 $132.6 $135.4 $129.6 $123.5 $124.1 Adjusted EBITDA $82.6 $118.8 $140.0 $141.6 $142.2 $142.4 Capex 29.7 68.6 86.8 65.8 81.6 92.8 Unlevered Free Cash Flow $52.9 $50.2 $53.2 $75.8 $60.6 $49.6 G&A / mcfe $0.39 $0.39 $0.36 $0.37 $0.37 $0.37 LOE / mcfe $1.62 $1.36 $1.30 $1.23 $1.16 $1.15

 

 

2017 Guidance 50 ▶ EVEP provided the following guidance to the market in the Q4 2016 earnings release in March ▶ EVEP generally provides guidance only for the current fiscal year, and does not update quarterly ▶ Divested ~1,200 marginal wells in Ohio and Pennsylvania at the beginning of the 2 nd quarter (not reflected in the guidance at right) ♦ Natural gas and crude production guidance reduced 650 Mmcf and 15 Mbbls respectively, for 2Q – 4Q17 ♦ LOE and other reduced $1.2MM for 2Q – 4Q17 Key Comments 2017 Guidance ($ in millions) Net Production Natural Gas (Mmcf) 40,720 - 45,005 Crude Oil (Mbbls) 1,325 - 1,465 Natural Gas Liquids (Mbbls) 2,055 - 2,270 Total Mmcfe 61,000 - 67,415 Average Daily Production (Mmcfe/d) 167 - 185 Net Transportation Margin (a) $0.5 - $1.0 Average Price Differential vs NYMEX Natural Gas ($/Mcf) ($0.37) - ($0.25) Crude Oil ($/Bbl) ($5.40) - ($3.90) NGL (% of NYMEX Crude Oil) 34% - 38% Expenses Operating Expenses: LOE and other $98.1 - $108.5 Production Taxes (as % of revenue) 4.2% - 5.2% - General and administrative expense (b) $22.0 - $26.0 Capital Expenditures (c) $30.0 - $45.0 (a) Represents estimated transportation and marketing-related revenues less cost of purchased natural gas. (b) Excludes non-cash general and administrative expense, of which non-cash unit based compensation is a part, also excludes any amounts for future acquisition related due diligence and transaction costs. (c) Represents estimates for drilling and related capital expenditures. Does not include any amounts for acquisitions of oil and gas properties. Full Year 2017 (1) (2) (3) (1) Represents estimated transportation and marketing - related less cost of purchased natural gas (2 ) Excludes non - cash G&A , of which non - cash unit based comp is a part, also excludes any amounts for future acquisition related due diligence and transaction costs (3) Represents estimates for drilling and related capital expenditures. Does not include any amounts for acquisitions of oil and gas propert ies

 

 

Omnibus Fee Methodology “ EnerVest and the General Partner will determine the amount of general and administrative expenses that will be properly allocated to the Partnership in accordance with the terms of the Partnership Agreement which determination will be subject to approval by the Conflicts Committee” - 2006 Omnibus Agreement , Section 3.3(a) 51 ▶ Reviewed allocation of costs based upon several factors ♦ Reserves, production, well count, capital ▶ Discussed between EVEP and EnerVest management ▶ Retained Opportune, LLC to review EnerVest overall G&A ♦ Worked closely with EnerVest management and staff to obtain and review data ▶ Factored in contribution of EVEP through unit grants

 

 

G&A Summary ▶ 2017 G&A allocation of $14.1 million, as per the 2017 Omnibus Agreement 1 ♦ Including EVEP "direct compensation", represents ~18% of total estimated EnerVest costs ▶ 2017 Direct MLP cash G&A costs (Salaries, Insurance, Accounting, netting out Units Vesting etc.) projected at $10.0 million ▶ Total 2017 Cash G&A of $24.1 million = $0.38/ Mcfe 52 ( $ in millions, except rates) 2016 2017E Change Omnibus $15.9 $14.1 (11%) Expected Production ( Bcfe ) 70.6 64.0 (9) Omnibus Rate ($/ Mcfe ) $0.23 $0.22 (2) Additional Cash G&A above Omnibus 11.1 10.0 (10) Total Cash G&A $27.0 $24.1 (11%) Total Cash G&A Rate ($/ Mcfe ) 0.38 0.38 (2) Inst’l Funds EVEP Total 2P Reserves 86.1% 13.9% 100.0% 2P PV10 88.0% 12.0% 100.0% 2017 Production 83.0% 17.0% 100.0% Proportional Well Count 60.9% 39.1% 100.0% Employee Time Spent 66.1% 24.3% 100.0% 2017 Capex 95.6% 4.4% 100.0% Mean 18.4% 2017 Omnibus Review (1) Omnibus agreement based on projections as of February 2017; will not tie to current projections due to divestiture of OH/PA m arg inal well package

 

 

Proven Ability to Reduce Operating Costs $1.92 $1.81 $1.74 $1.69 $1.66 $1.56 $1.46 $1.00 $1.25 $1.50 $1.75 $2.00 2010 2011 2012 2013 2014 2015 2016 Total LOE per Mcfe($/Mcfe) ▶ By leveraging economies of scale in our major basins and maximizing operational efficiencies, we’ve built a record of continually reducing operating costs ♦ Among the lowest cost operators in all of our major basins Total LOE ($ / Mcfe ) 53

 

 

Case Study: Reducing OPEX on Acquired Assets 54 Barnett Shale Acquisition Note: LOE includes all operating expenses except gathering and production taxes. ▶ We seek to acquire mature, and often times, neglected assets in our existing operating areas and apply cost efficiency measures to increase margins ♦ To the right is an example of a 2011 acquisition in the Barnett Shale ▶ Gathering and transportation costs not included due to accounting difference between the seller and EVEP ♦ However , by renegotiating contracts, gathering per M cfe for this asset was reduced 25% from an average of $ 0.67/ M cfe during the first four years of operation (2012 – 2015), to $ 0.50/ M cfe in 2016

 

 

Capital Structure 55 ($ in millions) Capital Structure Summary Note: Market values based on prices at October 31, 2017 Credit Facility Covenants Summary Implied Implied Amount Par Market Market Market Yield to Final Issue Outstanding Leverage Price Value Leverage Rate Worst Maturity Credit Facility ($325mm Borrowing Base) $263 $263 L+250-350 Jan-19/Feb-20 Total Secured Debt $263 3.0x $263 3.0x 8.000% Notes due 2019 343 42.0 144 8.0% 84.3% Apr-19 Total Debt $606 7.2x $407 4.8x Less: Cash (14) (14) Net Debt $592 7.0x $393 4.6x Market Capitalization 30 30 Total Capitalization $623 7.4x $423 5.0x 2017E EBITDA $83 Cash $14 Revolver Availability 62 Liquidity $76 ▶ Senior Secured Debt to EBITDAX: No greater than 4.0 for fiscal quarter ending December 31, 2017 ▶ Total Debt to EBITDAX : no greater than (a) for the fiscal quarter ending March 31, 2018, 5.50 to 1.0, (b) for the fiscal quarters ending June 30, 2018 and September 30, 2018, 5.25 to 1.0 and (c) for the fiscal quarter ending December 31, 2018 and thereafter, 4.25 to 1.0 ▶ EBITDAX to Cash Interest E xpense: ratio to be no less than (a) for the fiscal quarters ending March 31, 2017 and June 30, 2017, 2.0 to 1.0 and (b) for the fiscal quarters ending September 30, 2017 and thereafter, 1.5 to 1.0 ▶ L imits cash held by EVEP to the greater of 5% of the current borrowing base or $30.0 million ▶ Par leverage calculated using the par value of the notes ▶ Implied market leverage calculated using the market price of the notes

 

 

Credit Facility Parties 56 Lender Current Commitment JP Morgan Chase Bank, N.A. $32.3 Wells Fargo Bank , N.A. $27.5 Citibank $27.5 Compass Bank $20.8 Comerica Bank $20.8 ING Capital $20.8 Royal Bank of Canad a $20.8 The Bank of Nova Scotia $20.8 U.S. Bank $20.8 Bank of America $20.8 Bank of America Credit Products $18.8 Angelo, Gordon & Co. $18.8 Frost National Bank $15.0 CIBC $15.0 Regions Bank $15.0 Amegy Bank (Zions) $10.0 Total $325.0 ($ in millions)

 

 

Commodity Hedging 57 Gas Volume Hedged (Mmcf/d ) Oil Volume Hedged ( MBbl /d ) Swap Collar ▶ 1.4 MBbl /d of ethane at $11.66 for 2017 ▶ 1.3 MBbl /d of propane at $30.55 for 4Q17 Costless Collars: $2.75 – $3.27 Swaps: $3.07 ▶ 1.3 MBbl /d of propane at $36.12 for 1Q18

 

 

Strategy Going Forward 58 ▶ Focus on managing and enhancing base business ♦ Operating and capital cost reductions ▶ Maintain strong liquidity position to manage through current environment ▶ Continue to evaluate long - life, producing properties in upstream A&D market ▶ Continue to focus on plan to reduce total leverage

 

Exhibit 99.3

 

EVEP Operational Update & 2018 Budget February 26, 2018

 

 

Forward - Looking Statements Statements made in this presentation that are not historical facts are “forward - looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements include information future plans, our reserve quantities and the present value of our reserves, estimates of maintenance capital and other statements which include words such as “anticipates,” “plans,” “projects,” “expects,” “intends,” “believes,” ”should,” and similar expressions of forward - looking information. Forward - looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of EV Energy Partners, L.P. These statements are based on certain assumptions made by EV Energy Partners based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Actual results may differ materially from those discussed in this presentation. Such risks and uncertainties include, but are not limited to, changes in commodity prices, changes in reserve estimates, requirements and actions of purchasers of properties (including the Utica Shale and Eagle Ford assets), exploration and development activities, the availability and cost of financing, the returns on our capital investments and acquisition strategies, the availability of sufficient cash flow to pay distributions and execute our business plan and general economic conditions. Additional information on risks and uncertainties that could affect our business prospects and performance are provided in the most recent reports of EV Energy Partners with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward - looking statements, which speak only as of the date of this presentation. All forward - looking statements included in this presentation are expressly qualified in their entirety by the foregoing cautionary statements. Any forward - looking statement speaks only as of the date on which such statement is made and EVEP undertakes no obligation to correct or update any forward - looking statement, whether as a result of new information, future events or otherwise. 2

 

 

Forward - Looking Statements (Cont’d) This presentation contains projections for the Company for the 2018 and 2019 fiscal years. Neither the Company nor its independent petroleum engineering firm have audited, reviewed, compiled, or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, none of them expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this presentation. These projections are for illustrative purposes only and should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the projected information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projected information. Even if our assumptions and estimates are correct, projections are inherently uncertain due to a number of factors outside our control. There can be no assurance that the projected results are indicative of the future performance of the Company. 3

 

 

(Production amounts in mmcfe/d) Average Daily Production Area Q4 % FY 2018 % 18-Jan 18-Dec Jan-Dec Change Capital ($MM) Barnett 55.7 33% 59.0 33% 56.7 60.2 6% $27.2 Austin Chalk 17.7 10% 24.0 14% 20.6 25.9 25% 19.0 Karnes County 7.7 5% 7.2 4% 8.4 6.6 (22%) 8.6 Greater Mid-Con 10.8 6% 11.7 7% 12.1 11.9 (2%) 2.1 San Juan/Permian 27.8 16% 25.2 14% 26.3 24.6 (6%) 0.1 Appalachia 50.3 30% 49.6 28% 50.4 48.1 (5%) 0.0 Total 170.1 176.7 174.5 177.1 2% $57.0 Budget Production & Capital By Area 4 Note: Appalachia includes Utica, Michigan, and Monroe (1) Includes August 1, 2017 acquisition from acquisition date forward, which is currently producing approximately 2.7 mmcfed ▶ 70 gross wells budgeted to be drilled in 2018 ♦ 27 – Barnett @ 31% WI ♦ 10 – Chalk @ 12 - 40% WI ♦ 30 – Eagle Ford @ 2 - 6% WI ♦ 3 – Mid - Con (1)

 

 

Strip Rebound 2018 2019 2018 2019 Natural Gas $2.82 $2.78 $3.25 $3.25 Crude $61.76 $57.69 $70.00 $70.00 ▶ We use recent strip pricing as well as a rebound pricing case ▶ Production, margins, LOE, production taxes and Capex are from preliminary division budgets ♦ P roduction averages 176.7 mmcfed ♦ Natural gas ( - $0.39 per mcf) and crude ( - $3.50 per barrel) differentials are static dollar amounts, NGLs are ~38% of WTI ♦ LOE of $102 MM ♦ G&A of $27 MM (net of $14MM restructuring costs) ♦ Budgeted capital of $57MM ▶ Assumes restructuring is completed in 2Q ’18 with senior notes converting to equity and $14MM in restructuring costs ▶ 2019 assumptions include: ♦ 4% annual production growth from $57 MM of Capex ♦ LOE held flat at 4Q ’18 rate of $1.59/ Mcfe ♦ Cash G&A held flat 2018 Budget Assumptions 5

 

 

($mm unless otherwise specified) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 2018E 2019E Strip (2/23/2018) Price Deck Henry Hub ($/Mcf) $3.00 $2.69 $2.76 $2.85 $2.82 $2.78 WTI ($/Bbl) $60.95 $63.35 $62.15 $60.58 $61.76 $57.69 Gas Production (mmcf) 10,041 10,457 10,625 10,539 41,663 42,928 Oil Production (mbbls) 398 377 359 356 1,489 1,536 NGL Production (mbbls) 546 580 588 604 2,318 2,388 Total Production (mmcfe) 15,703 16,200 16,307 16,297 64,506 66,469 Total Production (mmcfe/d) 174.5 178.0 177.3 177.1 176.7 182.1 Oil & Gas Revenue $61.7 $60.5 $60.2 $60.1 $242.5 $238.2 Hedge Gain (Loss) 2.0 – – – 2.0 – Net Transportation Revenue 0.2 0.2 0.2 0.2 0.7 0.7 Total Revenue $63.9 $60.7 $60.4 $60.3 $245.3 $239.0 LOE (incl. ad valorem and gathering) $25.4 $25.5 $25.6 $26.0 $102.4 $106.0 Production Taxes 2.9 2.8 2.8 2.8 11.4 11.2 Cash General & Administrative 7.1 6.7 6.7 6.7 27.2 27.2 Total Expenses $35.4 $35.0 $35.1 $35.5 $141.0 $144.4 Adjusted EBITDAX $28.5 $25.8 $25.2 $24.8 $104.3 $94.6 Less: Cash Interest Expense $3.2 $3.3 $3.3 $3.3 $13.0 $11.9 Less: Total Capex 18.2 9.2 14.4 15.3 57.0 57.0 Less: Restructuring Charges 3.5 10.2 – – 13.7 – Free Cash Flow $3.6 $3.1 $7.5 $6.2 $20.5 $25.7 Credit Facility $262.6 $259.5 $252.0 $245.8 $245.8 $220.4 Senior Unsecured Notes 343.3 – – – – – Total Debt $605.9 $259.5 $252.0 $245.8 $245.8 $220.4 Total Debt / LTM EBITDAX 6.77x 2.77x 2.47x 2.36x 2.36x 2.33x 6 Financial Projections Budget – Strip Pricing (1) G&A is net of $14MM restructuring costs (1)

 

 

($mm unless otherwise specified) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 2018E 2019E Rebound Pricing Henry Hub ($/Mcf) $3.25 $3.25 $3.25 $3.25 $3.25 $3.25 WTI ($/Bbl) $70.00 $70.00 $70.00 $70.00 $70.00 $70.00 Gas Production (mmcf) 10,041 10,457 10,625 10,539 41,663 42,928 Oil Production (mbbls) 398 377 359 356 1,489 1,536 NGL Production (mbbls) 546 580 588 604 2,318 2,388 Total Production (mmcfe) 15,703 16,200 16,307 16,297 64,506 66,469 Total Production (mmcfe/d) 174.5 178.0 177.3 177.1 176.7 182.1 Oil & Gas Revenue $69.7 $70.4 $69.9 $69.9 $279.9 $288.4 Hedge Gain (Loss) (0.2) – – – (0.2) – Net Transportation Revenue 0.2 0.2 0.2 0.2 0.7 0.7 Total Revenue $69.7 $70.6 $70.1 $70.1 $280.5 $289.2 LOE (incl. ad valorem and gathering) $25.4 $25.5 $25.6 $26.0 $102.4 $106.0 Production Taxes 3.3 3.3 3.3 3.3 13.2 13.6 Cash General & Administrative 7.1 6.7 6.7 6.7 27.2 27.2 Total Expenses $35.8 $35.5 $35.6 $36.0 $142.8 $146.7 Adjusted EBITDAX $33.9 $35.1 $34.5 $34.1 $137.7 $142.5 Less: Cash Interest Expense $3.2 $3.1 $2.9 $2.8 $12.0 $9.1 Less: Total Capex 18.2 9.2 14.4 15.3 57.0 57.0 Less: Restructuring Charges 3.5 10.2 – – 13.7 – Free Cash Flow $9.1 $12.6 $17.2 $16.0 $54.9 $76.3 Credit Facility $257.1 $244.5 $227.4 $211.4 $211.4 $135.3 Senior Unsecured Notes 343.3 – – – – – Total Debt $600.4 $244.5 $227.4 $211.4 $211.4 $135.3 Total Debt / LTM EBITDAX 6.32x 2.25x 1.80x 1.54x 1.54x 0.95x 7 Financial Projections Budget – Rebound Pricing ($ 3.25 / $70.00 ) (1) G&A is net of $14MM restructuring costs (1)

 

 

 

Exhibit 99.4

 

Solicitation Version

 

IN THE UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

 

  )  
In re: ) Chapter 11
  )  
EV Energy Partners, L.P., et al.,1 ) Case No. 18-_____ (___)
  )  
Debtors. ) (Joint Administration Pending)
  )  

 

DIsclosure statement for the
Joint PREPACKAGED chapter 11 Plan of reorganization of
ev energy partners, l.p. and its debtor affiliates

 

Joshua A. Sussberg (pro hac vice admission pending) Laura Davis Jones (Del. Bar 2436)
Jeremy David Evans (pro hac vice admission pending) PACHULSKI STANG ZIEHL & JONES LLP
KIRKLAND & ELLIS LLP 919 North Market Street, 17th Floor
KIRKLAND & ELLIS INTERNATIONAL LLP Wilmington, DE 19801
601 Lexington Avenue Telephone: (302) 652-4100
New York, New York 10022 Facsimile: (302) 652-4400
Telephone:      (212) 446-4800  
Facsimile:        (212) 446-4900  
   
-and-  
   

James H.M. Sprayregen, P.C. (pro hac vice admission pending)

Brad Weiland (pro hac vice admission pending)
Travis M. Bayer (pro hac vice admission pending)

 
Kirkland & Ellis LLP  
KIRKLAND & ELLIS INTERNATIONAL LLP  
300 North LaSalle  
Chicago, Illinois 60654  
Telephone:       (312) 862-2000  
Facsimile:         (312) 862-2200  

 

 

1The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are:  EV Energy Partners, L.P. (5690); EV Properties, L.P. (5543); EV Properties GP, LLC (3943); Enervest Production Partners, Ltd. (8619); EVPP GP, LLC (8340); CGAS Properties, L.P. (7277); EVCG GP, LLC (7274); Enervest Monroe Marketing, Ltd. (7606); Enervest Monroe Gathering, Ltd. (7608); EV Energy GP, LP (5646); EV Management, LLC (5594); EV Energy Finance Corp. (3405); Belden & Blake, LLC (6642); and EnerVest Mesa, LLC (1725). The Debtors’ service address is: 1001 Fannin Suite 800, Houston, TX, 77002.

 

 

 

 

THIS IS A SOLICITATION OF VOTES TO ACCEPT OR REJECT THE PLAN IN ACCORDANCE WITH BANKRUPTCY CODE SECTION 1125 AND WITHIN THE MEANING OF BANKRUPTCY CODE SECTION 1126, 11 U.S.C. §§ 1125, 1126.  THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT.  THE DEBTORS INTEND TO SUBMIT THIS DISCLOSURE STATEMENT TO THE BANKRUPTCY COURT FOR APPROVAL FOLLOWING COMMENCEMENT OF SOLICITATION AND THE DEBTORS’ FILING FOR RELIEF UNDER CHAPTER 11 OF THE BANKRUPTCY CODE.  THE INFORMATION IN THIS DISCLOSURE STATEMENT IS SUBJECT TO CHANGE.  THIS DISCLOSURE STATEMENT IS NOT AN OFFER TO SELL ANY SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY ANY SECURITIES.

 

important information regarding this disclosure statement

 

DISCLOSURE STATEMENT, DATED March 14, 2018

 

Solicitation of Votes on
the joint prepackaged Chapter 11 Plan of REORGANIZATION
FOR ev energy partners, l.p. AND ITS DEBTOR AFFILIATES PURSUANT TO
CHAPTER 11 OF THE BANKRUPTCY CODE From the Holders of Outstanding:

 

Voting Class   Name of Class Under the Plan
Class 3   rbl facility claims
Class 4   Senior notes claims

 

If you are in CLASS 3 or CLASS 4 You are receiving this document and the accompanying materials because you are entitled to vote on the plan

 

DELIVERY OF BALLOTS

 

Ballots must be actually received by the Solicitation Agent by the Voting
Deadline, which is 5:00 p.m. (prevailing eastern Time) on March
30, 2018, via THE
ENCLOSED PRE-PAID, PRE-ADDRESSED RETURN ENVELOPE

 

or

 

at the following addresses:

 

via first-class mail, overnight courier, or hand delivery to:

 

ev energy partners, l.p., et al.

c/o PRIME CLERK, LLC

sOLICITATION GROUP

830 third avenue, 3rd floor
NEW YORK, NEW YORK 10022

or

 

via e-mail to:

 

EVEPBALLOTS@PRIMECLERK.COM

 

please choose only one method to return your ballot

 

 ii 

 

 

BALLOTS RECEIVED VIA FACSIMILE WILL NOT BE COUNTED

 

If you have any questions on the procedure for voting on the Plan, please

call the SOLICITATION AGENT at:

 

(347) 505-7138 OR (877) 755-4210 (toll free)

 

This disclosure statement (this “Disclosure Statement”) provides information regarding the Joint Prepackaged Chapter 11 Plan of Reorganization for EV Energy Partners, L.P. and its Debtor Affiliates (as may be amended, supplemented, or otherwise modified from time to time, the “Plan”),2 which the Debtors are seeking to have confirmed by the Bankruptcy Court. A copy of the Plan is attached hereto as Exhibit A. The Debtors are providing the information in this Disclosure Statement to certain holders of Claims for purposes of soliciting votes to accept or reject the Plan.

 

Pursuant to the RSA, the Plan is currently supported by the Debtors, Consenting RBL Lenders holding approximately 94 percent of the amount of RBL Facility Claims, Senior Noteholders holding approximately 70 percent of the amount of Senior Notes Claims, and the EnerVest Parties.

 

The consummation and effectiveness of the Plan are subject to certain material conditions precedent described herein and set forth in Article IX of the Plan. There is no assurance that the Bankruptcy Court will confirm the Plan or, if the Bankruptcy Court does confirm the Plan, that the conditions necessary for the Plan to become effective will be satisfied or in the alternative waived.

 

The Debtors urge each holder of a Claim or Interest to consult with its own advisors with respect to any legal, financial, securities, tax, or business advice in reviewing this Disclosure Statement, the Plan, and each proposed transaction contemplated by the Plan.

 

The Debtors strongly encourage holders of Claims in Class 3 and Class 4, to read this Disclosure Statement (including the Risk Factors described in Article VIi hereof) and the Plan in their entirety before voting to accept or reject the Plan. Assuming the requisite acceptances to the Plan are obtained, the Debtors will seek the Bankruptcy Court’s approval of the Plan at the Confirmation Hearing.

 

RECOMMENDATION BY THE DEBTORs

 

Each Debtor’S board of directors, member, or manager, as applicable, has approved the transactions contemplated by the Plan AND DESCRIBED IN THIS DISCLOSURE STATEMENT, AND each DEBTOR BELIEVES THAT THE COMPROMISES CONTEMPLATED UNDER THE PLAN ARE FAIR AND EQUITABLE, MAXIMIZE THE VALUE OF each of THE DEBTOr’s ESTATES, AND PROVIDE THE BEST RECOVERY TO CLAIM and Interest HOLDERS. AT THIS TIME, each DEBTOR BELIEVEs THAT THE PLAN AND RELATED TRANSACTIONS REPRESENT THE BEST ALTERNATIVE FOR ACCOMPLISHING THE DEBTORS’ overall RESTRUCTURING OBJECTIVES. each of the DEBTORS THEREFORE STRONGLY recommends that all holders of claims whose votes are being solicited submit Ballots to accept the Plan by returning their ballots so as to be actually received by the Solicitation Agent no later than March 30, 2018 at 5:00 p.m. (prevailing EASTERN Time) pursuant to the instructions set forth herein and on the ballots.

 

 

2Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Plan.

 

 iii 

 

 

SPECIAL NOTICE REGARDING FEDERAL AND STATE SECURITIES LAWS

 

The Bankruptcy Court has not reviewed this Disclosure Statement or the Plan, and the securities to be issued on or after the Effective Date will not have been the subject of a registration statement filed with the United States Securities and Exchange Commission (the “SEC”) under the United States Securities Act of 1933 as amended (the “Securities Act”) or any securities regulatory authority of any state under any state securities law (“Blue Sky Laws”). The Plan has not been approved or disapproved by the SEC or any state regulatory authority and neither the SEC nor any state regulatory authority has passed upon the accuracy or adequacy of the information contained in this Disclosure Statement or the Plan. Any representation to the contrary is a criminal offense. The Debtors are relying on section 4(a)(2) and/or Regulation D of the Securities Act, and similar Blue Sky Laws provisions, to exempt from registration under the Securities Act and Blue Sky Laws the offer to certain holders of Senior Notes Claims in Class 4 that are “accredited investors” as defined in Rule 501 of the Securities Act (“Accredited Investors”), respectively, of new securities prior to the Petition Date, including in connection with the solicitation of votes to accept or reject the Plan (the “Solicitation”).

 

After the Petition Date, the Debtors will rely on section 1145(a) of the Bankruptcy Code to exempt from registration under the Securities Act and Blue Sky Laws the offer, issuance, and distribution of New Common Stock and New Warrants under the Plan, and the shares of New Common Stock issuable upon exercise of the New Warrants. Neither the Solicitation nor this Disclosure Statement constitutes an offer to sell or the solicitation of an offer to buy securities in any state or jurisdiction in which such offer or solicitation is not authorized.

 

Except to the extent publicly available, this Disclosure Statement, the Plan, and the information set forth herein and therein are confidential. This Disclosure Statement and the Plan contain material non-public information concerning the Debtors, their subsidiaries, and their respective debt and Securities. Each recipient hereby acknowledges that it (a) is aware that the federal securities laws of the United States prohibit any person who has material non-public information about a company, which is obtained from the company or its representatives, from purchasing or selling Securities of such company or from communicating the information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such Securities and (b) is familiar with the United States Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”) and the rules and regulations promulgated thereunder, and agrees that it will not use or communicate to any Person or Entity, under circumstances where it is reasonably likely that such Person or Entity is likely to use or cause any Person or Entity to use, any confidential information in contravention of the Securities Exchange Act or any of its rules and regulations, including Rule 10b-5.

 

 iv 

 

 

DISCLAIMER

 

This Disclosure Statement contains summaries of certain provisions of the Plan and certain other documents and financial information. The information included in this Disclosure Statement is provided solely for the purpose of soliciting acceptances of the Plan and should not be relied upon for any purpose other than to determine whether and how to vote on the Plan. All holders of Claims entitled to vote to accept or reject the Plan are advised and encouraged to read this Disclosure Statement and the Plan in their entirety before voting to accept or reject the Plan. The Debtors believe that these summaries are fair and accurate. The summaries of the financial information and the documents that are attached to, or incorporated by reference in, this Disclosure Statement are qualified in their entirety by reference to such information and documents. In the event of any inconsistency or discrepancy between a description in this Disclosure Statement, on the one hand, and the terms and provisions of the Plan or the financial information and documents incorporated in this Disclosure Statement by reference, on the other hand, the Plan or the financial information and documents, as applicable, shall govern for all purposes.

 

Except as otherwise provided in the Plan or in accordance with applicable law, the Debtors are under no duty to update or supplement this Disclosure Statement. The Bankruptcy Court’s approval of this Disclosure Statement does not constitute a guarantee of the accuracy or completeness of the information contained herein or the Bankruptcy Court’s endorsement of the merits of the Plan. The statements and financial information contained in this Disclosure Statement have been made as of the date hereof unless otherwise specified. Holders of Claims or Interests reviewing the Disclosure Statement should not assume at the time of such review that there have been no changes in the facts set forth in this Disclosure Statement since the date of this Disclosure Statement. No holder of a Claim or Interest should rely on any information, representations, or inducements that are not contained in or are inconsistent with the information contained in this Disclosure Statement, the documents attached to this Disclosure Statement, and the Plan. This Disclosure Statement does not constitute legal, business, financial, or tax advice. Any Person or Entity desiring any such advice should consult with their own advisors. Additionally, this Disclosure Statement has not been approved or disapproved by the Bankruptcy Court, the SEC, or any securities regulatory authority of any state under Blue Sky Laws. The Debtors are soliciting acceptances to the Plan prior to commencing any cases under chapter 11 of the Bankruptcy Code.

 

The financial information contained in or incorporated by reference into this Disclosure Statement has not been audited, except as specifically indicated otherwise.  The Debtors’ management, in consultation with the Debtors’ advisors, has prepared the financial projections attached hereto as Exhibit E and described in this Disclosure Statement (the “Financial Projections”).  The Financial Projections, while presented with numerical specificity, necessarily were based on a variety of estimates and assumptions that are inherently uncertain and may be beyond the control of the Debtors’ management.  Important factors that may affect actual results and cause the management forecasts not to be achieved include, but are not limited to, risks and uncertainties relating to the Debtors’ businesses (including their ability to achieve strategic goals, objectives, and targets over applicable periods), industry performance, the regulatory environment, general business and economic conditions and other factors.  The Debtors caution that no representations can be made as to the accuracy of these projections or to their ultimate performance compared to the information contained in the forecasts or that the forecasted results will be achieved.  Therefore, the Financial Projections may not be relied upon as a guarantee or other assurance that the actual results will occur.

 

Regarding contested matters, adversary proceedings, and other pending, threatened, or potential litigation or other actions, this Disclosure Statement does not constitute, and may not be construed as, an admission of fact, liability, stipulation, or waiver by the Debtors or any other party, but rather as a statement made in the context of settlement negotiations in accordance with Rule 408 of the Federal Rules of Evidence and any analogous state or foreign laws or rules. As such, this Disclosure Statement shall not be admissible in any non-bankruptcy proceeding involving the Debtors or any other party in interest, nor shall it be construed to be conclusive advice on the tax, securities, financial or other effects of the Plan to holders of Claims against or Interests in, the Debtors or any other party in interest. Please refer to Article VII of this Disclosure Statement, entitled “Risk Factors” for a discussion of certain risk factors that holders of Claims voting on the Plan should consider.

 

Except as otherwise expressly set forth herein, all information, representations, or statements contained herein have been provided by the Debtors. No person is authorized by the Debtors in connection with this Disclosure Statement, the Plan, or the Solicitation to give any information or to make any representation or statement regarding this Disclosure Statement, the Plan, or the Solicitation, in each case, other than as contained in this Disclosure Statement and the exhibits attached hereto or as otherwise incorporated herein by reference or referred to herein. If any such information, representation, or statement is given or made, it may not be relied upon as having been authorized by the Debtors.

 

 v 

 

 

This Disclosure Statement contains certain forward-looking statements, all of which are based on various estimates and assumptions. Such forward-looking statements are subject to inherent uncertainties and to a wide variety of significant business, economic, and competitive risks, including, but not limited to, those summarized herein. When used in this Disclosure Statement, the words “anticipate,” “believe,” “estimate,” “will,” “may,” “intend,” and “expect” and similar expressions generally identify forward-looking statements. Although the Debtors believe that their plans, intentions, and expectations reflected in the forward-looking statements are reasonable, they cannot be sure that they will be achieved. These statements are only predictions and are not guarantees of future performance or results. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by a forward-looking statement. All forward-looking statements attributable to the Debtors or Persons or Entities acting on their behalf are expressly qualified in their entirety by the cautionary statements set forth in this Disclosure Statement. Forward-looking statements speak only as of the date on which they are made. Except as required by law, the Debtors expressly disclaim any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

 

[Remainder of Page Intentionally Left Blank]

 

 vi 

 

 

TABLE OF CONTENTS

 

I. INTRODUCTION 1
     
II. the plan 2
A. Treatment of Claims and Interests 2
B. New Capital Structure 2
C. Unclassified Claims 4
D. Classified Claims and Interests 5
E. Liquidation Analysis 11
F. Valuation Analysis 11
G. Financial Information and Projections 11
     
III. SOlICITATION AND VOTING PROCEDURES 12
A. Classes Entitled to Vote on the Plan 12
B. Votes Required for Acceptance by a Class 12
C. Certain Factors to Be Considered Prior to Voting 12
D. Classes Not Entitled To Vote on the Plan 13
E. Solicitation Procedures 13
F. Voting Procedures 14
     
IV. THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW 15
A. The Debtors’ Corporate History 15
B. The Debtors’ Assets and Operations 15
C. Shared Services and JOAs 17
D. Hedging and Trading Activities 18
E. Prepetition Capital Structure 19
     
V. eVENTS LEADING TO THE CHAPTER 11 CASES 19
A. Market Downturn 20
B. Response to Market Conditions 20
C. Organizational Changes 22
D. The RSA 22
     
VI. other key aspects of the plan 22
A. Provisions for Implementation of the Plan 22
B. Treatment of Executory Contracts and Unexpired Leases 25
C. Provisions Governing Distributions 27
D. Procedures for Resolving Disputed Claims and Interests 29
E. Release, Injunction, and Related Provisions 31
F. Modification, Revocation, or Withdrawal of the Plan 35
G. Reservation of Rights 35
H. Plan Supplement Exhibits 35
I. Conditions Precedent to the Effective Date 35
J. Waiver of Conditions Precedent 36
K. Effect of Non-Occurrence of Conditions to Consummation 36
     
VII. RISK FACTORS 37
A. General 37
B. Risks Relating to the Plan and Other Bankruptcy Law Considerations 37
C. Risks Relating to the Restructuring Transactions 42
D. Risks Relating to the New Common Stock and New Warrants 45
E. Risks Relating to the Debtors’ Business 46
F. Certain Tax Implications of the Chapter 11 Cases 49
G. Disclosure Statement Disclaimer 49

 

 vii 

 

 

VIII. CONFIRMATION PROCEDURES 52
A. The Confirmation Hearing 52
B. Confirmation Standards 52
C. Best Interests Test / Liquidation Analysis 53
D. Feasibility 54
E. Confirmation Without Acceptance by All Impaired Classes 54
F. Alternatives to Confirmation and Consummation of the Plan 55
     
IX. IMPORTANT securities law disclosure 55
A. New Common Stock and New Warrants 55
B. Issuance and Resale of New Common Stock and New Warrants 55
C. Resales of New Common Stock and New Warrants; Definition of Underwriter 55
D. New Common Stock & Management Incentive Plan 57
     
X. Certain U.S. Federal Income Tax Consequences 57
A. Introduction 57
B. Certain U.S. Federal Income Tax Consequences to the Debtors and EVEP Limited Partners 58
C. Certain U.S. Federal Income Tax Consequences to U.S. Holders of Certain Claims 61
     
XI. CONCLUSION AND RECOMMENDATION 67

 

 viii 

 

 

EXHIBITS

 

Exhibit A Joint Prepackaged Chapter 11 Plan of Reorganization for EV Energy Partners, L.P. and Its Debtor Affiliates
   
Exhibit B RSA
   
Exhibit C Liquidation Analysis
   
Exhibit D Valuation Analysis
   
Exhibit E Financial Projections
   
Exhibit F New Warrant Term Sheet
   
Exhibit G Governance Term Sheet

 

 ix 

 

 

I.INTRODUCTION

 

The Debtors were founded in 2006 as an upstream master limited partnership with the goal of acquiring proven, lower-risk oil and gas properties in the United States in order to leverage their operating and development expertise. Over the years, the Debtors have grown their assets through aggressively searching for, evaluating, acquiring and developing lower-risk onshore oil and gas properties with relatively long reserve lives and low production decline rates. A more comprehensive discussion of the Debtors’ businesses is set forth in Article IV hereof.

 

The Debtors have outstanding funded debt obligations in the aggregate principal amount of approximately $612,348,000, consisting of the following:

 

·approximately $269,000,000 under the RBL Facility, and

 

·approximately $343,348,000 of principal owed on account of the Senior Notes.

 

In the months and years leading up to their decision to seek relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), the Debtors faced a number of economic hurdles. The difficulties faced by the Debtors are consistent with those impacting the oil and gas industry more broadly. Beginning in late 2014, the prices for oil, natural gas, and natural gas liquids (“NGLs”) sharply declined and have remained low relative to price levels prior to mid-2014.

 

The Debtors’ proposed restructuring, as contemplated by the RSA, enjoys the overwhelming support of the Senior Noteholders (holding approximately 94 percent in amount of Senior Notes Claims) and the Consenting RBL Lenders (holding approximately 70 percent in amount of RBL Facility Claims.

 

Given the overwhelming support for the Debtors’ restructuring by the RSA Parties, the Debtors elected to pursue a prepackaged restructuring in the weeks leading up to the solicitation period because the Debtors believe a prepackaged plan will maximize value by minimizing both the costs of restructuring and the impact on the Debtors’ businesses. Among other things, the Debtors intend to file motions to avoid the need to file schedules of assets and liabilities or statements of financial affairs, which will provide them with significant cost savings. In addition, the restructuring contemplated by the Plan in a “prepackaged” manner, will obviate the need for an unsecured creditors’ committee and the expenses associated therewith that would otherwise be paid by the Debtors’ estates. Thus, the Debtors believe that the Plan represents the most efficient route to effectuate their restructuring and will place the Debtors, their trade partners and other stakeholders in an optimal position going forward.

 

If confirmed and consummated, the Plan will: (a) significantly deleverage the Debtors’ balance sheet; (b) distribute New Common Stock and New Warrants to the holders of Senior Notes Claims and Existing EVEP Equity Interests, as applicable; (c) allow holders of General Unsecured Claims to remain Unimpaired; and (d) maximize recoveries for all key stakeholders.

 

The formulation of the RSA and Plan contemplated thereunder is a significant achievement for the Debtors in the face of their leverage and liquidity issues and current and projected oil, natural gas and NGL prices. Each of the Debtors strongly believes that the Plan is in the best interests of each of their estates and represents the best available alternative for all of their stakeholders. Given the Debtors’ asset base and experienced management and operating team and strategic business plan going-forward, the Debtors believe that they can implement the Plan’s balance sheet restructuring to ensure the Debtors’ long-term viability. Through this prepackaged chapter 11 plan of reorganization the Debtors intend to emerge from chapter 11 on an expedited timeline within approximately 75 days following the Petition Date on a schedule to be established by the Bankruptcy Court.3

 

 

3The core terms of the RSA will be implemented through the Plan (described more fully in Article II of this Disclosure Statement, entitled “The Plan”).

 

 1 

 

 

II.the plan

 

A.Treatment of Claims and Interests

 

The Plan provides for the treatment of Claims against and Interests in the Debtors through, among other things: (1) the issuance of New Common Stock and the New Warrants; (2) the Unimpaired treatment of certain Claims and Interests; and (3) conversion of certain Claims into loans under the Exit Facilities. As more fully described herein and in the Plan:

 

·holders of Allowed RBL Facility Claims that vote to accept the Plan shall receive (i) new revolving loans under the Amended RBL Credit Facility in an amount equal to the principal amount of the Allowed RBL Facility Claim held by such holder as of the Effective Date, (ii) Cash in an amount equal to the accrued and unpaid interest and letter of credit fees payable to such holder under the RBL Credit Agreement as of the Effective Date, and (iii) unfunded commitments and letter of credit participation under the Amended RBL Credit Facility equal to the unfunded commitments and letter of credit participation of such holder as of the Effective Date;

 

·holders of Allowed RBL Facility Claims that (x) vote to reject the Plan or (y) fail to properly submit a ballot shall receive (i) new term loans under the Alternative Term Loan in an amount equal to the principal amount of the Allowed RBL Facility Claim held by such holder as of the Effective Date and (ii) Cash in an amount equal to the accrued and unpaid interest payable to such holder under the RBL Credit Agreement as of the Effective Date;

 

·holders of Allowed Senior Notes Claims shall receive their Pro Rata share of 95 percent of the New Common Stock (subject to dilution by the MIP Shares and New Common Stock issued pursuant to the New Warrants);

 

·holders of Allowed General Unsecured Claims shall remain Unimpaired and paid in the ordinary course of business;

 

·all Existing EVEP Equity Interests will be canceled, released, and extinguished and will be of no further force or effect, and holders of Existing EVEP Equity Interests will not receive any distribution on account of such Interests. Notwithstanding the foregoing, on the Effective Date, holders of Existing EVEP Equity Interests shall receive their Pro Rata share of: (i) five percent of the New Common Stock (subject to dilution by the MIP Shares and New Common Stock issued pursuant to the New Warrants); and (ii) the New Warrants;

 

·Intercompany Claims and Intercompany Interests shall be Reinstated as of the Effective Date or, at the Debtors’ (with the consent of the Required Consenting Noteholders, not to be unreasonably withheld) or the Reorganized Debtors’ option, be cancelled, and no distribution shall be made on account of such Claims;

 

·Section 510(b) Claims shall be cancelled without any distribution and holders of Section 501(b) Claims shall receive no recovery; and

 

·holders of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Other Secured Claims, Allowed Other Priority Claims, and Allowed Professional Claims will be (1) paid in full in Cash, (2) Reinstated, or (3) otherwise rendered Unimpaired, as applicable.

 

B.New Capital Structure

 

On the Effective Date, the Debtors will effectuate the Restructuring Transactions by, among other things:  (1) entering into the Exit Facilities; (2) issuing the New Common Stock and New Warrants to the holders of Senior Notes Claims and Existing EVEP Equity Interests, as applicable, in accordance with Article III of the Plan; and (3) entering into all related documents to which the Reorganized Debtors are contemplated to be a party on the Effective Date.  All such documents shall become effective in accordance with their terms and the Plan.

 

 2 

 

 

(1)Exit Facilities

 

(a)Amended RBL Credit Facility

 

On the Effective Date the Debtors will amend and restate the RBL Credit Agreement (the “Amended RBL Credit Agreement”; and the revolving facility thereunder, the “Amended RBL Credit Facility”) on such terms and conditions set forth in the RBL Term Sheet attached to the RSA and acceptable to the Debtors, the Required Consenting Noteholders, the RBL Agent, and the Consenting RBL Lenders. The Amended RBL Credit Agreement will include, among other amendments, (i) an extension of the maturity date through 2021, (ii) a new borrowing base of $325 million (less any Alternative Term Loans) and a borrowing base redetermination holiday until April 1, 2019, (iii) certain covenant modifications reasonably acceptable to the Debtors, the Required Consenting Noteholders, the RBL Agent, and the Consenting RBL Lenders and (iv) such other terms and conditions acceptable to the Debtors, the Required Consenting Noteholders, the RBL Agent, and the Consenting RBL Lenders.

 

Each holder of an Allowed RBL Facility Claim that votes to accept the Plan shall receive, in full and final satisfaction, settlement, release, and discharge of and in exchange for such Claim, its share of the Amended RBL Credit Facility equal to the principal amount of loans under the RBL Credit Agreement held by such holder as of the Effective Date. Letters of credit issued and outstanding under the RBL Credit Agreement shall be deemed issued under the Amended RBL Credit Agreement, and the Consenting RBL Lenders will hold participations in such letters of credit equal to their participations in letters of credit issued under the RBL Credit Agreement.

 

(b)Alternative Term Loan

 

On the Effective Date, if applicable, the Debtors will issue the Alternative Term Loan (as defined below) under the Amended RBL Credit Agreement. Each holder of an Allowed RBL Facility Claim that (i) votes to reject the Plan or (ii) fails to properly submit a ballot, shall receive, in full and final satisfaction, settlement, release, and discharge of and in exchange for such Claim, its share of new term loans under the Alternative Term Loan in an amount equal to the principal amount of loans under the RBL Credit Agreement held by such holder as of the Effective Date. The terms of the Alternative Term Loan shall be as set forth on the RBL Term Sheet and otherwise acceptable to the Required Consenting Noteholders, the Debtors, the Amended RBL Credit Facility Agent and the Required Consenting RBL Lenders.

 

Intercreditor arrangements in form and substance acceptable to the Amended RBL Credit Facility Agent, the Required Consenting RBL Lenders, the Debtors and the Required Consenting Noteholders shall be incorporated into the Amended RBL Credit Agreement or a separate intercreditor agreement as such parties may determine. 

 

(2)New Common Stock and New Warrants

 

On or as reasonably practicable after the Effective Date, EV NewCo Parent shall issue and distribute the New Common Stock and the New Warrants, to holders of Allowed Senior Notes Claims and Allowed Interests entitled to receive New Common Stock and New Warrants, pursuant to the Plan. The issuance of the New Common Stock, including the MIP Shares and the New Warrant Equity, and the New Warrants shall be authorized without the need for any further corporate action and without any further action by the Debtors, the Reorganized Debtors or EV NewCo Parent, or by holders of Allowed Senior Notes Claims or Allowed Interests. EV NewCo Parent’s New Organizational Documents shall authorize the issuance and distribution on the Effective Date of the New Common Stock and the New Warrants, to the applicable Distribution Agent for the benefit of holders of Allowed Claims and Allowed Interests in Class 4 and Class 6 (as applicable) in accordance with the terms of Article III of the Plan. All New Common Stock issued under the Plan, including the New Warrant Equity, shall be duly authorized, validly issued, fully paid, and non-assessable, and the holders of the New Warrants shall be deemed to be a party to, and bound by, the terms of the New Warrant Agreement (solely in their capacity as warrant holders of EV NewCo Parent), without further action or signature. Each of the Registration Rights Agreement and the New Warrant Agreement shall be effective as of the Effective Date and, as of such date, shall be deemed to be valid, binding, and enforceable in accordance with its terms.

 

 3 

 

 

C.Unclassified Claims

 

(1)Unclassified Claims Summary

 

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Professional Claims, and Priority Tax Claims have not been classified and thus are excluded from the Classes of Claims set forth in Article III of the Plan. The Claim recoveries for such unclassified Claims are set forth below:

 

Unclassified Claim  Plan
Treatment
  Estimated
Allowed
Claims
   Estimated %
Recovery Under
the Plan
   Estimated %
Recovery
Under Chapter
74
 
Administrative Claims  Unimpaired  $3,323,000    100%   100%
Professional Claims  Unimpaired  $5,386,125    100%   100%
Priority Tax Claims  Unimpaired  $45,333    100%   100%

 

(2)Unclassified Claims

 

(a)Administrative Claims

 

Except with respect to Administrative Claims that are Professional Claims and except to the extent that an Administrative Claim has already been paid during the Chapter 11 Cases or a holder of an Allowed Administrative Claim and the applicable Debtor(s) with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld) agree to less favorable treatment, each holder of an Allowed Administrative Claim shall be paid in full in Cash on the unpaid portion of its Allowed Administrative Claim on the latest of: (i) on or as soon as reasonably practicable after the Effective Date if such Administrative Claim is Allowed as of the Effective Date; (ii) on or as soon as reasonably practicable after the date such Administrative Claim is Allowed; and (iii) the date such Allowed Administrative Claim becomes due and payable, or as soon thereafter as is reasonably practicable; provided that Allowed Administrative Claims that arise in the ordinary course of the Debtors’ businesses shall be paid in the ordinary course of business in accordance with the terms and subject to the conditions of any agreements governing, instruments evidencing, or other documents relating to such transactions. Notwithstanding the foregoing, no request for payment of an Administrative Claim need be Filed with respect to an Administrative Claim previously Allowed by Final Order.

 

(b)Professional Claims

 

As soon as reasonably practicable after the Confirmation Date and no later than the Effective Date, the Debtors shall establish the Professional Fee Escrow Account. The Debtors shall fund the Professional Fee Escrow Account with Cash equal to the Professional Fee Amount. The Professional Fee Escrow Account shall be funded no later than the Effective Date and maintained in trust for the Professionals and shall not be considered property of the Debtors’ Estates; provided that the Reorganized Debtors shall have a reversionary interest in the excess, if any, of the amount of the Professional Fee Escrow Account over the aggregate Allowed Professional Claims to be paid from the Professional Fee Escrow Account

 

All final requests for payment of Professional Claims incurred during the period from the Petition Date through the Effective Date, shall be Filed no later than 60 days after the Effective Date. All Entities’ respective rights (if any) to object to allowance or payment of all or any portion of any Professional Claims shall be preserved. After notice and a hearing in accordance with the procedures established by the Bankruptcy Code, Bankruptcy Rules and prior Bankruptcy Court orders, the Allowed amounts of such Professional Claims shall be determined by the Bankruptcy Court. The amount of Professional Claims owing to the Professionals shall be paid in Cash to such Professionals from funds held in the Professional Fee Escrow Account when such Claims are Allowed by a Final Order. To the extent that funds held in the Professional Fee Escrow Account are unable to satisfy the Allowed amount of Professional Claims owing to the Professionals, such Professionals shall have an Allowed Administrative Claim for any such deficiency, which shall be satisfied in accordance with Article II.A of the Plan. After all Professional Claims have been either paid in full or Disallowed, the Final Order allowing such Professional Claims shall direct the escrow agent to return any excess amounts to the Reorganized Debtors.

 

 

4The Debtors liquidation analysis (the “Liquidation Analysis”) is attached hereto as Exhibit C.

 

 4 

 

 

(c)Priority Tax Claims

 

Except to the extent that a holder of an Allowed Priority Tax Claim and the applicable Debtor(s) with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld) agree to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each holder of such Allowed Priority Tax Claim shall be treated in accordance with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy Code and, for the avoidance of doubt, holders of Allowed Priority Tax Claims will receive interest on such Allowed Priority Tax Claims after the Effective Date in accordance with sections 511 and 1129(a)(9)(C) of the Bankruptcy Code. To the extent any Allowed Priority Tax Claim is not due and owing on the Effective Date, such Claim shall be paid in accordance with the terms of any agreement between the Debtors and the holder of such Claim, or as may be due and payable under applicable non-bankruptcy law, or in the ordinary course of business. In the event an Allowed Priority Tax Claim is also a Secured Tax Claim, such Claim shall, to the extent it is Allowed, be treated as an Other Secured Claim if such Claim is not otherwise paid in full.

 

(d)Statutory Fees

 

All fees due and payable pursuant to section 1930 of Title 28 of the U.S. Code prior to the Effective Date shall be paid by the Debtors. On and after the Effective Date, the Reorganized Debtors shall pay any and all such fees when due and payable, and shall File with the Bankruptcy Court quarterly reports in a form reasonably acceptable to the U.S. Trustee. Each Debtor shall remain obligated to pay quarterly fees to the U.S. Trustee until the earliest of that particular Debtor’s case being closed, dismissed, or converted to a case under Chapter 7 of the Bankruptcy Code.

 

D.Classified Claims and Interests

 

(1)Classified Claims and Interests Summary

 

The Plan establishes a comprehensive classification of Claims and Interests. The table below summarizes the classification, treatment, voting rights, and estimated recoveries, estimated as of March 12, 2018, of the Claims and Interests, by Class, under the Plan. Amounts in the far right column under the heading “Liquidation Recovery” are estimates only and are based on certain assumptions described herein and set forth in greater detail in the Liquidation Analysis (as defined below) attached hereto as Exhibit C. Accordingly, recoveries actually received by holders of Claims and Interests in a liquidation scenario may materially differ from the projected liquidation recoveries listed in the table below.

 

Class   Classified Claims  Plan Treatment  Estimated
Allowed Claims
   Estimated %
Recovery
Under the
Plan
   Estimated %
Recovery
Under
Chapter 7
 
 1   Other Secured Claims  Unimpaired  $500,000    100%  100%
 2   Other Priority Claims  Unimpaired  $0    100%  100%

 

 5 

 

 

Class   Classified Claims  Plan Treatment  Estimated
Allowed Claims
   Estimated %
Recovery
Under the
Plan
   Estimated %
Recovery
Under
Chapter 7
 3   RBL Facility Claims  Impaired  $269,237,600    100%  100%
 4   Senior Notes Claims  Impaired  $343,348,000    57.8%  23.3%–34.3%
 5   General Unsecured Claims  Unimpaired  $600,0005   100%  23.3%–34.3%
 6   Existing EVEP
Equity Interests
  Impaired   N/A    0%  0%
 7   Intercompany Claims  Unimpaired/Impaired   N/A    0–100%  0%
 8   Intercompany Interests  Unimpaired/Impaired   N/A    0–100%  0%
 9   Section 510(b) Claims  Impaired  $0    0%  0%

 

(2)Classified Claims and Interests Details

 

Except to the extent that the Debtors, with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld) and a holder of an Allowed Claim or Allowed Interest, as applicable, agree to less favorable treatment, such holder shall receive under the Plan the treatment described below in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such holder’s Allowed Claim or Allowed Interest. Unless otherwise indicated, the holder of an Allowed Claim or Allowed Interest, as applicable, shall receive such treatment on the Effective Date or as soon as reasonably practicable thereafter, or, if payment is not due, in accordance with its terms in the ordinary course.

 

(a)Class 1 — Other Secured Claims

 

i.              Classification: Class 1 consists of any Other Secured Claims against any Debtor.

 

ii.             Treatment: To the extent that any Allowed Other Secured Claims exist, on or as soon as practicable after the Effective Date, holders of such Other Secured Claims Allowed as of the Effective Date, if not paid previously, shall, at the option of the Debtors, with the consent of the Required Consenting Noteholders, either:

 

(a)       be satisfied by payment in full in Cash;

 

(b)       have their Other Secured Claims Reinstated pursuant to section 1124 of the Bankruptcy Code; or

 

 

5The estimate of Claims in this table assumes that any Claims that may be subject to setoff will be netted and set off prior to the Effective Date.  The Debtors reserve all rights with respect to whether any Claims are subject to setoff.

 

 6 

 

 

(c)       receive such other recovery as is necessary to satisfy section 1129 of the Bankruptcy Code.

 

iii.            Voting: Class 1 is Unimpaired. Holders of Allowed Other Secured Claims in Class 1 are conclusively presumed to have accepted the Plan under section 1126(f) of the Bankruptcy Code. Therefore, each holder of an Allowed Other Secured Claim in Class 1 is not entitled to vote to accept or reject the Plan.

 

(b)Class 2 — Other Priority Claims

 

i.              Classification: Class 2 consists of any Other Priority Claims against any Debtor.

 

ii.             Treatment: Each holder of an Allowed Other Priority Claim shall be paid in full in Cash of the unpaid portion of its Other Priority Claim on the Effective Date or as soon as reasonably practicable thereafter, or, if payment is not due, in accordance with its terms in the ordinary course, or otherwise receive treatment consistent with the provisions of Bankruptcy Code section 1129(a), in each case, as determined by the Debtors with the consent of the Required Consenting Noteholders, not to be unreasonably withheld.

 

iii.            Voting: Class 2 is Unimpaired. Holders of Allowed Other Priority Claims in Class 2 are conclusively presumed to have accepted the Plan under section 1126(f) of the Bankruptcy Code. Therefore, each holder of an Allowed Other Priority Claim in Class 2 is not entitled to vote to accept or reject the Plan.

 

(c)Class 3 — RBL Facility Claims

 

i.              Classification: Class 3 consists of all RBL Facility Claims.

 

ii.             Allowance: On the Effective Date, the RBL Facility Claims shall be allowed in the aggregate principal amount of not less than $269,000,000, plus the principal amount of loans borrowed under the RBL Credit Agreement after March 13, 2018 (which shall include the face amount of any letters of credit drawn after the Petition Date), plus accrued and unpaid interest as of the Effective Date, plus the face amount of any letters of credit issued under the RBL Credit Agreement as of the Effective Date, plus all fees (including agency fees), expenses and other amounts that constitute Secured Obligations (as defined in the RBL Guarantee and Collateral Agreement), including any RBL Claims arising under Secured Swap Agreements (as defined in the RBL Guarantee and Collateral Agreement), and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual or otherwise), counterclaims, crossclaims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any person or entity.

 

iii.            Treatment: On the Effective Date, in full and final satisfaction, settlement, release, and discharge of and in exchange for the RBL Facility Claims, each holder of an Allowed RBL Facility Claim (other than RBL Claims arising under Secured Swap Agreements (as defined in the RBL Guarantee and Collateral Agreement) shall receive either:

 

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(a)       if such holder of an Allowed RBL Facility Claim votes to accept the Plan, (i) new revolving loans under the Amended RBL Credit Facility in an amount equal to the principal amount of loans under the RBL Credit Agreement held by such holder as of the Effective Date, (ii) cash in an amount equal to the accrued but unpaid interest and letter of credit fees payable to such holder (including in its capacity as issuing bank of any letters of credit) under the RBL Credit Agreement as of the Effective Date and (iii) unfunded commitments and letter of credit participation under the Amended RBL Credit Agreement equal to the unfunded commitments (if any) and letter of credit participation of such Consenting RBL Lender as of the Effective Date (it being understood that the unfunded commitments and letter of credit participations of Non-Consenting RBL Lenders shall not be reallocated amongst the Consenting RBL Lenders and the Reorganized Debtors shall cash collateralize the letter of credit participations of such Non-Consenting RBL Lenders); or

 

(b)       if such holder of an Allowed RBL Facility Claim (x) votes to reject the Plan or (y) fails to properly submit a ballot, (i) Alternative Term Loans in an amount equal to the principal amount of loans under the RBL Credit Agreement held by such holder as of the Effective Date and (ii) cash in an amount equal to the accrued but unpaid interest payable to such Non-Consenting RBL Lender under the RBL Credit Agreement as of the Effective Date.

 

To the extent a Secured Swap Agreement is terminated and results in an RBL Facility claim, such RBL Facility claims will be paid in full in Cash on the Effective Date. All letters of credit issued and outstanding under the RBL Credit Agreement as of the Effective Date shall be deemed issued and outstanding under the Amended RBL Credit Agreement on and after the Effective Date.

 

iv.           Voting: Class 3 is Impaired. Holders of Allowed RBL Facility Claims in Class 3 are entitled to vote to accept or reject the Plan.

 

(d)Class 4 — Senior Notes Claims

 

i.             Classification: Class 4 consists of all Senior Notes Claims.

 

ii.             Allowance: The Senior Notes Claims shall be Allowed in the aggregate principal amount of $343,348,000, plus accrued and unpaid interest as of the Petition Date.

 

iii.            Treatment: On the Effective Date, and following consummation of the Restructuring Transactions, in full and final satisfaction, settlement, release, and discharge of and in exchange for the Senior Notes Claims, each holder of an Allowed Senior Notes Claim will own its Pro Rata share of 95 percent of the New Common Stock (subject to dilution by the MIP Shares and shares of New Common Stock issued pursuant to the New Warrants); or

 

iv.            Voting: Class 4 is Impaired. Each holder of an Allowed Senior Notes Claim in Class 4 is entitled to vote to accept or reject the Plan.

 

(e)Class 5 — General Unsecured Claims

 

i.             Classification: Class 5 consists of any General Unsecured Claims against any Debtor.

 

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ii.             Treatment: On the Effective Date or as soon as reasonably practicable thereafter, except to the extent that a holder of an Allowed General Unsecured Claim has already been paid during the Chapter 11 Cases or such holder agrees to less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for its Allowed General Unsecured Claim, each holder of an Allowed General Unsecured Claim shall receive, at the applicable Debtor’s option:

 

(a)       if such Allowed General Unsecured Claim is due and payable on or before the Effective Date, payment in full, in cash, of the unpaid portion of its Allowed General Unsecured Claim;

 

(b)       if such Allowed General Unsecured Claim is not due and payable before the Effective Date, payment in the ordinary course of business consistent with past practices; or

 

(c)       other treatment, as may be agreed upon by the Debtors, the Required Consenting Noteholders, and the holder of such Allowed General Unsecured Claim, such that the Allowed General Unsecured Claim shall be rendered Unimpaired pursuant to section 1124(1) of the Bankruptcy Code.

 

iii.            Voting: Class 5 is Unimpaired. Holders of Allowed General Unsecured Claims in Class 5 are conclusively presumed to have accepted the Plan under section 1126(f) of the Bankruptcy Code. Therefore, each holder of an Allowed General Unsecured Claim in Class 5 is not entitled to vote to accept or reject the Plan.

 

(f)Class 6 — Existing EVEP Equity Interests

 

i.              Classification: Class 6 consists of all Existing EVEP Equity Interests.

 

ii.             Treatment: On the Effective Date, all Existing EVEP Equity Interests will be canceled, released, and extinguished and will be of no further force or effect, and holders of Existing EVEP Equity Interests will not receive any distribution on account of such Interests. Notwithstanding the foregoing, on the Effective Date, holders of Existing EVEP Equity Interests shall receive their Pro Rata (based on their ultimate economic interests at the EVEP level) share of: (i) five percent of the New Common Stock (subject to dilution by the MIP Shares and New Common Stock issued pursuant to the New Warrants); and (ii) the New Warrants.

 

iii.            Voting: Class 6 is Impaired. Each holder of an Existing EVEP Equity Interest will be conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, each holder of an Existing EVEP Equity Interest will not be entitled to vote to accept or reject the Plan.

 

(g)Class 7— Intercompany Claims

 

i.             Classification: Class 7 consists of all Intercompany Claims.

 

ii.            Treatment: Intercompany Claims may be Reinstated as of the Effective Date or, at the Debtors’ (with the consent of the Required Consenting Noteholders, which consent shall not be unreasonably withheld) or the Reorganized Debtors’ option, be cancelled, and no distribution shall be made on account of such Claims.

 

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iii.            Voting: Class 7 is either Unimpaired, in which case the holders of Allowed Intercompany Claims in Class 7 are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code, or Impaired, and not receiving any distribution under the Plan, in which case the holders of such Allowed Intercompany Claims in Class 7 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, each holder of an Allowed Intercompany Claim in Class 7 will not be entitled to vote to accept or reject the Plan.

 

(h)Class 8 — Intercompany Interests

 

i.             Classification: Class 8 consists of any Intercompany Interests.

 

ii.             Treatment: Intercompany Interests may be Reinstated as of the Effective Date or, at the Debtors’ (with the consent of the Required Consenting Noteholders) or the Reorganized Debtors’ option, be cancelled, and no distribution shall be made on account of such Interests.

 

iii.            Voting: Class 8 is either Unimpaired, in which case the holders of Allowed Intercompany Interests in Class 8 are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code, or Impaired, and not receiving any distribution under the Plan, in which case the holders of such Allowed Intercompany Interests in Class 8 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, each holder of an Allowed Intercompany Interest in Class 8 will not be entitled to vote to accept or reject the Plan.

 

(i)Class 9 — Section 510(b) Claims

 

i.Classification: Class 9 consists of all Section 510(b) Claims.

 

ii.Treatment: On the Effective Date, each Section 510(b) Claim shall be cancelled without any distribution and such holders of Section 510(b) Claims will receive no recovery. The Debtors are not aware of any valid Section 510(b) Claims and believe that no such Section 510(b) Claims exist.

 

iii.Voting: Class 9 is Impaired. Each holder of a 510(b) Claim will be conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, each holder of a 510(b) Claim will not be entitled to vote to accept or reject the Plan.

 

(3)Special Provision Governing Unimpaired Claims

 

Except as otherwise specifically provided in the Plan, nothing herein shall be deemed to affect, diminish, or impair the Debtors’ or the Reorganized Debtors’ rights and defenses, both legal and equitable, with respect to any Reinstated Claim or Unimpaired Claim, including, but not limited to, legal and equitable defenses to setoffs or recoupment against Reinstated Claims or Unimpaired Claims; and, except as otherwise specifically provided in the Plan, nothing herein shall be deemed to be a waiver or relinquishment of any Claim, Cause of Action, right of setoff, or other legal or equitable defense which the Debtors had immediately prior to the Petition Date, against or with respect to any Claim left Unimpaired or Reinstated by the Plan. Except as otherwise specifically provided in the Plan, the Reorganized Debtors shall have, retain, reserve, and be entitled to assert all such Claims, Causes of Action, rights of setoff, and other legal or equitable defenses which they had immediately prior to the Petition Date fully as if the Chapter 11 Cases had not been commenced, and all of the Reorganized Debtors’ legal and equitable rights with respect to any Reinstated Claim or Unimpaired Claim may be asserted after the Confirmation Date and the Effective Date to the same extent as if the Chapter 11 Cases had not been commenced.

 

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E.Liquidation Analysis

 

The Debtors believe that the Plan provides the same or greater recovery for holders of Allowed Claims and Interests as would be achieved in the Debtors’ liquidation under chapter 7 of the Bankruptcy Code. This belief is based on a number of considerations, including: (1) the Debtors’ primary assets likely would have to be sold on a piecemeal basis in a chapter 7 liquidation; (2) the additional Administrative Claims generated by conversion to chapter 7 and any related costs in connection with a chapter 7 liquidation; and (3) the absence of a robust market for the liquidation of the Debtors’ assets and services.

 

The Debtors, with the assistance of Perella Wienberg Partners (“PWP”), the Debtors’ proposed investment banker, have prepared an unaudited liquidation analysis, which is attached hereto as Exhibit C (the “Liquidation Analysis”), to assist holders of Claims and Interests in evaluating the Plan. The Liquidation Analysis compares the projected recoveries that would result from the liquidation of the Debtors in hypothetical cases under chapter 7 of the Bankruptcy Code with the estimated distributions to holders of Allowed Claims and Interests under the Plan. The Liquidation Analysis is based on the value of the Debtors’ assets and liabilities as of a certain date and incorporates various estimates and assumptions, including a hypothetical conversion to chapter 7 as of a certain date. Further, the Liquidation Analysis is subject to potentially material changes, including with respect to economic and business conditions and legal rulings. Therefore, the actual liquidation value of the Debtors could vary materially from the estimate provided in the Liquidation Analysis.

 

F.Valuation Analysis

 

The Plan provides for the distribution of the New Common Stock and New Warrants to holders of Allowed Senior Notes Claims and holders of Allowed Existing EVEP Equity Interests, as applicable, upon consummation of the Plan. Accordingly, PWP, at the request of the Debtors, has performed an analysis, which is attached hereto as Exhibit D, of the estimated implied value of the Debtors on a going-concern basis as of May 14, 2018 (the “Valuation Analysis”). Based on the Valuation Analysis, the Reorganized Debtors will have an implied equity value at emergence of approximately $220 million at the midpoint.

 

The Valuation Analysis, including the procedures followed, assumptions made, qualifications, and limitations on review undertaken described therein, should be read in conjunction with Article VII of this Disclosure Statement, entitled “Risk Factors.” The Valuation Analysis is based on data and information as of February 28, 2018. Perella makes no representations as to changes to such data and information that may have occurred since the date of the Valuation Analysis.

 

G.Financial Information and Projections

 

In connection with the planning and development of the Plan, the Debtors, with the assistance of their advisors, prepared projections for the fiscal years 2018 and 2019, which are attached hereto as Exhibit E (the “Financial Projections”), including management’s assumptions related thereto. For purposes of the Financial Projections, the Debtors have assumed an Effective Date of May 14, 2018. The Financial Projections assume that the Plan will be implemented in accordance with its stated terms. The Debtors are unaware of any circumstances as of the date of this Disclosure Statement that would require the re-forecasting of the Financial Projections due to a material change in the Debtors’ prospects.

 

The Financial Projections are based on forecasts of key economic variables, such as production, realized price differentials relative to commodity price benchmarks, operating costs, production taxes, general and administrative expenses, and the level of capital expenditures and the resulting well performance, and may be significantly impacted by, among other factors, changes in commodity prices, regulatory changes, and/or a variety of other factors, including the factors listed in this Disclosure Statement. Accordingly, the estimates and assumptions underlying the Financial Projections are inherently uncertain and are subject to significant business, economic, and competitive uncertainties. Therefore, such projections, estimates, and assumptions are not necessarily indicative of current values or future performance, which may be significantly less or more favorable than set forth herein. The Financial Projections should be read in conjunction with the assumptions, qualifications, and explanations set forth in this Disclosure Statement and other financial information.

 

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III.SOlICITATION AND VOTING PROCEDURES

 

A.Classes Entitled to Vote on the Plan

 

The following Classes are entitled to vote to accept or reject the Plan (collectively, the “Voting Classes”):

 

Class   Claim or Interest   Status
3   RBL Facility Claims   Impaired
4   Senior Notes Claims   Impaired

 

If your Claim is not included in the Voting Classes, you are not entitled to vote and you will not receive a Solicitation Package (as defined below). If you are a holder of a Claim in one or more of the Voting Classes, you should read your ballot(s) and carefully follow the instructions included in the ballot(s). Please use only the ballot(s) that accompanies this Disclosure Statement or the ballot(s) that the Debtors, or the Solicitation Agent on behalf of the Debtors, otherwise provided to you. If you are a holder of a Claim in more than one of the Voting Classes, you will receive a ballot for each such Claim.

 

B.       Votes Required for Acceptance by a Class

 

Under the Bankruptcy Code, acceptance of a plan of reorganization by a class of claims is determined by calculating the amount and number of claims voting to accept, as a percentage of the allowed claims that have voted. Acceptance by a class of claims requires an affirmative vote of more than one-half in number of total allowed claims that have voted and an affirmative vote of at least two-thirds in dollar amount of the total allowed claims that have voted.

 

C.       Certain Factors to Be Considered Prior to Voting

 

There are a variety of factors that all holders of Claims entitled to vote on the Plan should consider prior to voting to accept or reject the Plan. These factors may impact recoveries under the Plan and include, among other things:

 

·unless otherwise specifically indicated, the financial information contained in the Disclosure Statement has not been audited and is based on an analysis of data available at the time of the preparation of the Plan and the Disclosure Statement;

 

·although the Debtors believe that the Plan complies with all applicable provisions of the Bankruptcy Code, the Debtors can neither assure such compliance nor that the Bankruptcy Court will confirm the Plan;

 

·the Debtors will request Confirmation without the acceptance of all Impaired Classes in accordance with section 1129(b) of the Bankruptcy Code; and

 

·any delays of either Confirmation or Consummation could result in, among other things, increased Administrative Claims and Professional Claims.

 

While these factors could affect distributions available to holders of Allowed Claims and Interests under the Plan, the occurrence or impact of such factors will not necessarily affect the validity of the vote of the Voting Classes or necessarily require a re-solicitation of the votes of holders of Claims in the Voting Classes.

 

For a further discussion of risk factors, please refer to “Risk Factors” described in Article VII of this Disclosure Statement.

 

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D.       Classes Not Entitled To Vote on the Plan

 

Under the Bankruptcy Code, holders of claims and interests are not entitled to vote if their contractual rights are unimpaired by the proposed plan or if they will receive no property under the plan. Accordingly, the following Classes of Claims against and Interests in the Debtors are not entitled to vote to accept or reject the Plan:

 

Class Claim or Interest Status Voting Rights
1 Other Secured Claims Unimpaired Not Entitled to Vote (Presumed to Accept)
2 Other Priority Claims Unimpaired Not Entitled to Vote (Presumed to Accept)
5 General Unsecured Claims Unimpaired Not Entitled to Vote (Presumed to Accept)
6 Existing EVEP Equity Interests Impaired Not Entitled to Vote (Deemed to Reject)6
7 Intercompany Claims Unimpaired / Impaired Not Entitled to Vote (Presumed to Accept / Deemed to Reject)
8 Intercompany Interests Unimpaired / Impaired Not Entitled to Vote (Presumed to Accept / Deemed to Reject)
9 Section 510(b) Claims Impaired Not Entitled to Vote (Deemed to Reject)

 

E.       Solicitation Procedures

 

(1)Solicitation Agent

 

The Debtors have retained Prime Clerk LLC, to act, among other things, as the Solicitation Agent in connection with the solicitation of votes to accept or reject the Plan.

 

(2)Solicitation Package

 

The following materials constitute the solicitation package (the “Solicitation Package”) distributed to holders of Claims in the Voting Classes:

 

the Debtors’ cover letter in support of the Plan;

 

a ballot and applicable voting instructions, together with a pre-paid, pre-addressed return envelope; and

 

this Disclosure Statement and all exhibits hereto, including the Plan and all exhibits thereto; provided that the Plan Supplement documents shall not be part of the Solicitation Package and, pursuant to the Plan, will be filed with the Bankruptcy Court no later than seven days prior to the Confirmation Hearing.

 

(3)Distribution of the Solicitation Package and Plan Supplement

 

The Debtors are causing the Solicitation Agent to distribute the Solicitation Package to holders of Claims in the Voting Classes on March 14, 2018.

 

 

6Although the holders of Existing EVEP Equity Interests are receiving property under the Plan, the votes of such holders are not being solicited because based upon the Valuation Analysis, the holders of Existing EVEP Equity Interests are not entitled to any recovery and, for administrative convenience, the Debtors are assuming Class 6 would vote to reject the Plan and will establish at the Confirmation Hearing that, with respect to Class 6, the requirements of 1129(b) are satisfied.

 

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The Solicitation Package (without ballots, unless you are an eligible voting party) may also be obtained from the Solicitation Agent by: (a) calling the Solicitation Agent at (347) 505-7138 or toll free at (877) 755-4210 and asking for the “Solicitation Group,” (b) emailing evepballots@primeclerk.com and referencing “EVEP” in the subject line, and/or (c) writing to the Solicitation Agent at Prime Clerk, LLC, 830 3rd Avenue, 3rd Floor, New York, New York 10022. After the Debtors file the Chapter 11 Cases, you may also obtain copies of any pleadings filed with the Bankruptcy Court for free by visiting the Debtors’ restructuring website, https://cases.primeclerk.com/evep, or for a fee via PACER at https://www.pacer.gov/. Holders should choose only one method to return their Ballot.

 

At least seven days before the Confirmation Hearing, the Debtors intend to file the Plan Supplement. If the Plan Supplement is updated or otherwise modified, such modified or updated documents will be made available on the Debtors’ restructuring website. The Debtors will not serve copies of the Plan Supplement; however, parties may obtain a copy of the Plan Supplement from the Solicitation Agent by: (a) calling the Solicitation Agent at the telephone number set forth above; (b) visiting the Debtors’ restructuring website, https://cases.primeclerk.com/evep; or (c) writing to the Solicitation Agent at Prime Clerk, LLC, 830 3rd Avenue, 3rd Floor, New York, New York 10022.

 

F.       Voting Procedures

 

March 12, 2018 (the “Voting Record Date”), is the date that was used for determining which holders of Claims are entitled to vote to accept or reject the Plan and receive the Solicitation Package in accordance with the solicitation procedures. Except as otherwise set forth herein, the Voting Record Date and all of the Debtors’ solicitation and voting procedures shall apply to all of the Debtors’ creditors and other parties in interest.

 

In order for the holder of a Claim in the Voting Classes to have its ballot counted as a vote to accept or reject the Plan, such holder’s ballot must be properly completed, executed, and delivered by (1) using the enclosed pre-paid, pre-addressed return envelope, (2) via first class mail, overnight courier, or hand delivery to EVEP Ballot Processing, c/o Prime Clerk LLC, 830 3rd Avenue, 3rd Floor, New York, NY 10022, or (3) via email (attaching a scanned PDF of the fully executed ballot) to evepballots@primeclerk.com and referencing “EVEP” in the subject line, so that such holder’s ballot is actually received by the Solicitation Agent on or before the Voting Deadline, i.e. March 30, 2018, at 5:00 p.m. (prevailing Eastern Time).

 

If you are a beneficial holder of a Senior Notes Claim in Class 4, you must certify that you are an Accredited Investor in order to vote on the Plan. Ballots received from any beneficial holder of a Senior Notes Claim that is not an Accredited Investor will not be counted.

 

If a holder of a Claim in a Voting Class transfers all of such Claim to one or more parties on or after the Voting Record Date and before the holder has cast its vote on the Plan, such Claim holder is automatically deemed to have provided a voting proxy to the purchaser(s) of the holder’s Claim, and such purchaser(s) shall be deemed to be the holder(s) thereof as of the Voting Record Date for purposes of voting on the Plan, provided that the transfer complies with the applicable requirements under the RSA, if applicable, and the purchaser and RBL Agent or Indenture Trustee, as applicable provide satisfactory confirmation of the transfer to the Solicitation Agent.

 

If you hold Claims in more than one Voting Class under the Plan, you should receive a separate Ballot for each Class of Claims, coded by Class number, and a set of solicitation materials. You may also receive more than one Ballot if you hold Claims through one or more affiliated funds, in which case the vote cast by each such affiliated fund will be counted separately. Separate Claims held by affiliated funds in a particular Class shall not be aggregated, and the vote of each such affiliated fund related to its Claims shall be treated as a separate vote to accept or reject the Plan (as applicable). If you hold any portion of a single Claim, you and all other holders of any portion of such Claim will be (1) treated as a single creditor for voting purposes and (2) required to vote every portion of such Claim collectively to either accept or reject the Plan.

 

IF A BALLOT IS RECEIVED AFTER THE VOTING DEADLINE, IT WILL NOT BE COUNTED UNLESS THE DEBTORS DETERMINE OTHERWISE.

 

ANY BALLOT THAT IS PROPERLY EXECUTED BY THE HOLDER OF A CLAIM BUT THAT DOES NOT CLEARLY INDICATE AN ACCEPTANCE OR REJECTION OF THE PLAN OR ANY BALLOT THAT INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE PLAN WILL NOT BE COUNTED FOR PURPOSES OF ACCEPTING OR REJECTING THE PLAN.

 

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EACH HOLDER OF A CLAIM ENTITLED TO VOTE ON THE PLAN MUST VOTE ALL OF ITS CLAIMS WITHIN A PARTICULAR CLASS EITHER TO ACCEPT OR REJECT THE PLAN AND MAY NOT SPLIT SUCH VOTES. BY SIGNING AND RETURNING A BALLOT, EACH HOLDER OF A CLAIM WILL CERTIFY TO THE BANKRUPTCY COURT AND THE DEBTORS THAT NO OTHER BALLOTS WITH RESPECT TO SUCH CLAIM HAVE BEEN CAST OR, IF ANY OTHER BALLOTS HAVE BEEN CAST WITH RESPECT TO SUCH CLASS OF CLAIMS, SUCH OTHER BALLOTS INDICATED THE SAME VOTE TO ACCEPT OR REJECT THE PLAN. IF A HOLDER CASTS MULTIPLE BALLOTS WITH RESPECT TO THE SAME CLAIM AND THOSE BALLOTS ARE IN CONFLICT WITH EACH OTHER, SUCH BALLOTS WILL NOT BE COUNTED FOR PURPOSES OF ACCEPTING OR REJECTING THE PLAN.

 

IT IS IMPORTANT THAT THE HOLDER OF A CLAIM IN THE VOTING CLASSES FOLLOW THE SPECIFIC INSTRUCTIONS PROVIDED ON SUCH HOLDER’S BALLOT AND THE ACCOMPANYING INSTRUCTIONS. NO BALLOT VOTING TO ACCEPT THE PLAN MAY BE WITHDRAWN OR MODIFIED AFTER THE VOTING DEADLINE WITHOUT THE DEBTORS’ PRIOR CONSENT OR PERMISSION OF THE BANKRUPTCY COURT.

 

IV.THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW

 

The Debtors are well-known leaders in the acquisition, efficient operation, and development of onshore oil and gas properties. The Debtors’ oil and gas properties span throughout the continental United States and include a portfolio of long-lived diverse assets. The Debtors specifically focus on oil and natural gas properties to generate cash flows and distributions for the long-term benefit of their unitholders and employees.

 

A.       The Debtors’ Corporate History

 

The Debtors were founded in 2006 and are headquartered in Houston, Texas. Over the years, the Debtors have grown their assets through aggressively searching for and evaluating lower-risk onshore acquisition opportunities. The Debtors firmly believe that these types of properties are the most likely to provide long-term cash flow with relatively low decline rates.

 

EVEP was founded in 2006 as a publicly held master limited partnership. Debtor EV Energy GP, L.P (“EV Energy GP”) is EVEP’s general partner and Debtor EV Management is the general partner of EV Energy GP. EV Management, in turn, is a wholly owned subsidiary of non-Debtor EnerVest, one of the 25 largest oil and natural gas companies in the United States. EnerVest and certain of its affiliates also have a significant interest in the Debtors through their 71.25 percent ownership of EV Energy GP, which, in turn, owns a two percent general partner interest in EVEP and all of its distribution rights.

 

B.       The Debtors’ Assets and Operations

 

The Debtors’ primary assets consist of producing and non-producing oil, natural gas, and NGL reserves (collectively, the “Debtor Reserves”), which are a mixture of full and partial working interests that provide the Debtors with the right to drill, produce, and maintain wells in specific geographic regions. Unlike many upstream companies with a focus on significant exploration and development drilling programs and high production growth, the Debtors focus on developing and managing more mature assets and drilling in known reservoirs. The Debtors do not serve as an operator for any of the Debtor Reserves. Instead, where the working interest entitles the Debtors or EnerVest- affiliated entities to control the appointment of an operator, non-Debtor affiliate EnerVest Operating, L.L.C. (“EVOC”) operates the property. Likewise, where a working interest does not entitle the Debtors to appoint an operator, other third-parties act as operator (the “Other Operators,” and collectively with EVOC, the “Operators”) The Operators design and manage the drilling and completion of the wells for the Debtor Reserves, while also managing the day-to-day operating and maintenance activities for the same.

 

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As of December 31, 2016, the Debtor Reserves consisted of either partial or full working interests in 21,493 gross operating oil and gas wells, and 13,800 net oil and gas wells. The Debtors own interests in approximately 1,407,331 net acres (approximately 899,601 developed and 507,730 undeveloped) and had estimated net proved reserves, as of December 31, 2016 of 854.2 billion cubic feet equivalent (“Bcfe”), consisting of approximately 12.6 million barrels of oil, 575.3 billion cubic feet (“Bcf”) of natural gas, and 33.4 million barrels of NGLs.

 

The Debtor Reserves are located in nine principal regions: (a) the Barnett Shale; (b) the San Juan Basin; (c) the Appalachian Basin (which includes the Utica Shale); (d) Michigan; (e) Central Texas (which includes the Austin Chalk area); (f) the Mid-Continent areas in Oklahoma, Texas, Arkansas, Kansas, and Louisiana; (g) the Permian Basin; (h) the Monroe Field in Northern Louisiana; and (i) Karnes County, Texas. Across these regions, the Debtors’ production for the nine months ended September 30, 2017 was approximately 46.5 Bcfe, consisting of approximately 1.0 million barrels of oil (“MMBbls”), 30.9 Bcf of natural gas, and 1.6 MMBbls of NGLs. For the first nine months ended September 30, 2017, the Debtors generated $34.3 million in net operating cash flows.

 

(1)Barnett Shale

 

The Debtor Reserves in the Barnett Shale are primarily located in Denton, Montague, Parker, Tarrant, and Wise counties. The Debtors’ estimated net proved reserves as of December 31, 2016 were 367.8 Bcfe, 65 percent of which was natural gas. During 2016, the Debtors successfully drilled nine gross wells in the Barnett Shale. EVOC operates wells representing 98 percent of the Debtors’ estimated net proved reserves in this area. At year-end 2016, the Debtors owned an average 26 percent working interest in approximately 1,560 gross productive wells in the Barnett Shale.

 

(2)San Juan Basin

 

The Debtors’ properties in the San Juan Basin are located primarily in Rio Arriba County, New Mexico and La Plata County, Colorado. The Debtors’ estimated net proved reserves as of December 31, 2016 were 144 Bcfe, 66 percent of which was natural gas. In 2016, the Debtors did not drill any new wells in the San Juan Basin. EVOC operates wells representing 97 percent of the Debtors’ estimated net proved reserves in the San Juan Basin. At year-end 2016, the Debtors owned an average 77 percent working interest in approximately 519 gross productive wells in the San Juan Basin.

 

(3)Appalachian Basin (including the Utica Shale)

 

The Debtor Reserves in the Appalachian Basin are concentrated in the Ohio and West Virginia areas of the Appalachian Basin. The Debtors’ Ohio properties are producing primarily from the Knox and Clinton formations and other Devonian age sands in 40 counties in eastern Ohio and eight counties in western Pennsylvania. The Debtors’ West Virginia properties are producing primarily from the Balltown, Benson, and Big Injun formations in 22 counties in North Central West Virginia. The Debtors’ estimated net proved reserves in the Appalachian Basin as of December 31, 2016 were 136.4 Bcfe, 67 percent of which was natural gas. In 2016, the Debtors did not drill any new wells in the Appalachian Basin. EVOC operates wells representing 88 percent of the Debtors’ estimated net proved reserves in the Appalachian Basin. At year-end 2016, the Debtors owned an average 71 percent working interest in approximately 11,238 gross productive wells in the Appalachian Basin.

 

(4)Michigan

 

The Debtor Reserves in Michigan are located in the Antrim Shale reservoir in Otsego and Montmorency counties. The Debtors’ estimated proved reserves in Michigan as of December 31, 2016 were 77.8 Bcfe, 96 percent of which was natural gas. In 2016, the Debtors did not drill any wells in Michigan. EVOC operates wells representing 99 percent of the Debtors’ estimated net proved reserves in Michigan. At year-end 2016, the Debtors owned an average 60 percent working interest in approximately 1,586 gross productive wells in Michigan.

 

(5)Central Texas

 

The Debtor Reserves in Central Texas are located in 16 counties in Central Texas and produce primarily from the Austin Chalk formation. The Debtors’ estimated net proved reserves in Central Texas as of December 31, 2016 were 49.1 Bcfe, 42 percent of which was natural gas. In 2016, the Debtors did not drill any wells in Central Texas. EVOC operates wells representing 97 percent of the Debtors’ estimated net proved reserves in Central Texas. At year-end 2016, the Debtors owned an average 22 percent working interest in approximately 1,462 gross productive wells in Central Texas.

 

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(6)Monroe Field

 

The Debtor Reserves in the Monroe Field are primarily located in two parishes in northeast Louisiana. The Debtors’ estimated net proved reserves in the Monroe Field as of December 31, 2016 were 27.9 Bcfe, 100 percent of which was natural gas. In 2016, the Debtors did not drill any wells in the Monroe Field. EVOC operates wells representing 100 percent of the Debtors’ estimated net proved reserves in the Monroe Field. At year-end 2016, the Debtors owned an average 100 percent working interest in approximately 3,244 gross productive wells in the Monroe Field.

 

(7)Mid-Continent Areas

 

The Debtor Reserves in the Mid-Continent Areas are primarily located in 43 counties in Oklahoma, 22 counties in Texas, four parishes in north Louisiana, two counties in Kansas, and six counties in Arkansas. The Debtors’ estimated net proved reserves in the Mid Continent Areas as of December 31, 2016 were 27.8 Bcfe, 68 percent of which was natural gas. In 2016, the Debtors did not drill any wells in the Mid-Continent Areas. EVOC operates wells representing 16 percent of the Debtors’ estimated net proved reserves in the Mid-Continent Areas. At year-end 2016, the Debtors owned an average 24 percent working interest in approximately 1,748 gross productive wells in the Mid-Continent Areas.

 

(8)Permian Basin

 

The Debtor Reserves in the Permian Basin are located in Yates, Seven Rivers, Queen, Morrow, Clear Fork, and Wichita Albany formations in four counties in New Mexico and Texas. The Debtors’ estimated net proved reserves in the Permian Basin as of December 31, 2016 were 20.4 Bcfe, 37 percent of which was natural gas. In 2016, the Debtors did not drill any wells in the Permian Basin. EVOC operates wells representing 99 percent of the Debtors’ estimated net proved reserves in the Permian Basin. At year-end 2016, the Debtors owned an average 96 percent working interests in approximately 136 gross productive wells in the Permian Basin.

 

(9)Karnes County, Texas

 

On January 31, 2017, the Debtors acquired a 5.8 percent working interest in oil and gas properties located in Karnes County, Texas for $58.7 million (net of post-closing purchase price adjustments). The Debtors’ estimated net proved reserves in Karnes County as of January 31, 2017 were 34.8 Bcfe, 61 percent of which was crude oil. EVOC operates wells representing 94 percent of the Debtors’ estimated net proved reserves in Karnes County. The Debtors own an average six percent working interest in 127 gross productive wells in the area.

 

C.       Shared Services and JOAs

 

(1)JOAs

 

As outlined above, the Debtors do not operate the Debtor Reserves and instead enter into Joint Operating Agreements (“JOAs”) with the Operators to operate their assets. Under the JOAs, the Debtors reimburse the Operators for: (a) direct expenses incurred in the operation of the Debtors’ wells and related gathering systems and production facilities; (b) the allocable share of the costs of the Operators’ employees who performed services with respect to the Debtor Reserves; and (c) the allocable share of royalties paid to landowners as a result of production generated at various working interests. For the nine months ended September 30, 2017, and for the full years of 2016 and 2015, the Debtors reimbursed EVOC approximately $14.0 million, $21.2 million, and $17.2 million, respectively for direct expenses incurred in the operation of the Debtors’ wells and related gathering systems and production facilities and for the allocable share of the costs of EVOC employees who performed services on the Debtors’ properties. As the vast majority of the expenses from EVOC are charged to the Debtors on an actual basis (i.e., no mark-up or subsidy is charged or received by EnerVest), the Debtors believe that the aforementioned services were provided at fair and reasonable rates relative to the prevailing market and are representative of the costs that would have been incurred on a standalone basis. These costs are included in lease operating expenses.

 

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(2)Shared Services

 

(a)       Omnibus Agreement

 

The Debtors rely on non-Debtor EnerVest to provide certain general and administrative services for the Debtors’ business and employees. These services are provided by EnerVest pursuant to that certain Omnibus Agreement among EnerVest, EV Management, EV Energy GP, EV Energy Partners, LP, and EV Properties, L.P., dated as of September 29, 2006 (as amended from time to time, the “Omnibus Agreement”). Under the Omnibus Agreement, EnerVest provides the Debtors with services such as accounting, engineering, geology, land, human resources, office space, and other administrative services. Through the Omnibus Agreement, the Debtors benefit from the technical expertise of EnerVest, which would otherwise not be available to a company of the Debtors’ size.

 

The services provided through the Omnibus Agreement are paid on a monthly basis pursuant to an allocation of charges between EnerVest and the Debtors based on the estimated use of such services by each party. For the nine months ended September 30, 2017, and for the full years of 2016, and 2015, the Debtors paid EnerVest $10.5 million, $15.9 million, and $14.2 million, respectively, based on this allocation method. The Debtors believe that the allocation method employed under the Omnibus Agreement is reasonable and reflective of the estimated level of costs the Debtors would have incurred on a standalone basis. These fees are included in general and administrative expenses.

 

(b)       Other Shared Services

 

In addition to the general and administrative services provided under the Omnibus Agreement, many of the Debtors’ other operational functions are provided by non-Debtor affiliates. For instance, because the Debtors are treated as pass-through entities, certain of the Debtors’ taxes are paid directly by EnerVest, with the Debtors reimbursing EnerVest on a monthly basis for their allocable share of such obligations. Additionally, insurance for EnerVest and each of its direct and indirect subsidiaries is provided under various “master” policies, which the Debtors are added to as “additional insureds.” EVOC pays the premiums under these master policies each year in October, and the Debtors reimburse EVOC for their allocable share of insurance premiums each month. Four of the six individuals who work for the Debtors (the “Employees”) are actually employed by non-Debtor EnerVest Employee Services, LLC (“EES”), while the Debtors’ Chief Executive Officer and Chief Financial Officer are employed by Debtor EV Management LLC. Non-Debtor EES provides compensation and benefits to the Employees (including the Employees employed by EV Management LLC) on a bi-weekly basis, and the Debtors reimburse EES for the entirety of such costs each month.

 

D.       Hedging and Trading Activities

 

Much of the Debtors’ business is subject to exposure in the commodity markets, particularly with respect to fluctuations in oil, natural gas, and NGL prices. To counteract this volatility, the Debtors undertake a number of risk-reducing practices, including entering into: (1) interest rate swaps; (2) commodity hedges; and (3) commodity contracts for the sale of oil, natural gas, and NGLs over various periods of time.

 

(1)Interest Rate Swaps

 

The Debtors’ RBL Facility is subject to floating interest rates, exposing the Debtors to potential downside risks with respect to their debt obligations. To counteract this risk, the Debtors enter into interest rate swaps (the “Swap Agreements”) to minimize the effects of fluctuations in interest rates. All of the Debtors’ Swap Agreements are with major financial institutions who are also lenders under the RBL Facility. As detailed more below, the Debtors have one outstanding Swap Agreement for a notional amount of $100 million, covering the period of January 2018 through September 2020. As of September 30, 2017, the net fair value of the Debtors’ Swap Agreements amount to an asset of approximately $78,000.

 

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(2)Commodity Hedges

 

The Debtors’ revenue is entirely subject to existing market conditions, particularly the prevailing worldwide price for oil and regional spot prices for natural gas production. The Debtors protect themselves from fluctuations in such market conditions by entering into commodity derivatives (the “Commodity Hedges”). All of the Debtors’ Commodity Hedges are with major financial institutions who are also lenders under the RBL Facility. The Debtors enter into the Commodity Hedges purely as a mechanism to hedge against price volatility and never for speculative purposes. At present, the Debtors have entered into Commodity Hedges hedging approximately 44 percent of their anticipated production through March 2018. As of September 30, 2017, the net fair value of the Debtors’ Commodity Hedges amounted to an asset of approximately $272,000.

 

E.       Prepetition Capital Structure

 

The Debtors have approximately $612,585,600 of funded debt. This amount includes approximately $269,237,600 in principal and letters of credit currently outstanding under the RBL Facility and approximately $343,348,000 of principal owed on account of the Senior Notes.

 

(a)       RBL Facility

 

The Debtors maintain a reserve-based first lien credit facility (the “RBL Facility”) of $1,000,000,000 under that certain Second Amended and Restated Credit Agreement dated as of April 26, 2011, by and among EVEP, as parent, EV Properties, L.P. (“EV Properties”), as borrower, the remaining Debtors (other than EV Management, EV Energy GP, and EV Energy Finance Corp.), as guarantors (collectively, the “RBL Guarantors”), each of the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, BNP Paribas and Wells Fargo, National Association, as co-syndication agents, and BBVA Compass and Citibank, N.A., as co-documentation agents. The RBL Facility has been amended ten times, most recently in October, 2017.

 

Presently, there are approximately $269,237,600 of principal borrowings and letters of credit outstanding under the RBL Facility, as of the date of this Disclosure Statement. The RBL Facility bears interest at a floating rate, subject to a borrowing base utilization grid, and matures in February 2020. The RBL Facility is secured by mortgages on approximately 95 percent of the value of the Debtor Reserves, liens on certain other assets, and pledges of ownership interests in EVEP, EV Properties, and the RBL Guarantors.

 

(b)       Senior Notes

 

The Debtors have approximately $343,348,000 in outstanding unsecured 8.0% senior notes due April 19, 2019, under that certain indenture dated as of March 22, 2011, as supplemented pursuant to that certain First Supplemental Indenture dated as of January 5, 2018 by and among EV Energy Partners, L.P. and EV Energy Finance Corp., as issuers, the remaining Debtors (other than EV Energy GP and EV Management), as guarantors (collectively, the “Senior Notes Guarantors”), and Delaware Trust Company, as successor trustee.

 

(c)       Common Units

 

As previously discussed, EVEP is a publicly held master limited partnership (“MLP”). As a MLP, 98 percent of EVEP’s equity is owned by limited partners (the “Unitholders”) in the form of common units (the “Common Units”). The other two percent of EVEP’s equity is owned by Debtor EV Energy GP as EVEP’s general partner. As of the Petition Date, there are approximately 49,368,869 Common Units issued and outstanding.

 

V.eVENTS LEADING TO THE CHAPTER 11 CASES

 

The Debtors intend to file the Chapter 11 Cases to implement a prepackaged chapter 11 plan of reorganization that provides for a comprehensive balance sheet restructuring of their funded debt obligations with the consent of the Consenting Senior Noteholders and the Consenting RBL Lenders. Given the events described in greater detail below and other considerations, the Debtors have concluded in the exercise of their business judgment and as fiduciaries for all of the Debtors’ stakeholders that the best path to maximize the value of their businesses is a strategic prepackaged chapter 11 filing to implement the Plan in accordance with the terms of the RSA.

 

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A.       Market Downturn

 

The difficulties faced by the Debtors are consistent with problems faced across the energy sector. Oil and gas companies have been challenged by low natural gas prices since late 2014, and prices remain below $3 per million British thermal units (“Btu”) today, down from approximately $6 per million Btu in early 2014. The price of NGLs, likewise, has undergone a steep decline. Oil prices have also remained depressed (approximately $62.77 per barrel for West Texas intermediate crude as of February 22, 2018, for example) compared to the historic highs reached in mid-2014 (more than $100 per barrel). These market conditions have affected oil and gas companies at every level of the industry, but upstream producers such as the Debtors have been especially hard-hit, as their revenues are generated from the sale of unrefined oil and natural gas. The current volatility in the commodity markets has made it especially difficult for some companies to identify and execute on any viable restructuring alternatives outside of the confines of chapter 11.

 

Despite these issues, however, the Debtors were able to maintain strong operations through the end of 2017, and the Debtors believe they have ample liquidity both to fund their Chapter 11 Cases and their post-emergence business plan. The Debtors’ current position results, in part, from key operational and financial responses to market volatility, as well as a proactive approach to addressing leverage concerns. Specifically, the Debtors determined that proactively pursuing a comprehensive balance sheet restructuring was preferable to attempting to wait out prevailing market conditions.

 

B.       Response to Market Conditions

 

(1)Operational and Financial Responses to Market Downturn.

 

In response to deteriorating market conditions, the Debtors implemented a disciplined strategy in recent years to maximize the value of their enterprise while mitigating the effects of declining commodity prices.

 

(a)       Strategic Efforts

 

In 2016, the Debtors:

·repurchased $82.7 million of their outstanding Senior Notes for $35 million;

 

·reduced the amount of capital spending they dedicated to the development of the Debtor Reserves by approximately 75 percent;

 

·reduced operating and capital costs;

 

·amended the RBL Facility to, among other things, ease leverage covenants until 2018 (described more fully below);

 

·continued to evaluate strategic divestitures such as the Barnett Shale divestiture (described more fully below) and acquisitions of long-life, producing oil and natural gas properties; and

 

·reevaluated their Common Unit distribution policy and suspended Common Unit distributions to conserve excess cash.

 

In 2017, continuing these mitigation efforts, the Debtors:

 

·managed and enhanced their base business through continued reductions in operating costs;

 

·increased their capital spending budget to $30 to 45 million from $10.7 million in 2016, in an effort to maintain production levels;

 

·maintained a sufficient liquidity position to manage through the current economic environment;

 

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·continued to evaluate strategic acquisitions of long-life, producing oil and natural gas properties such as the Eagle Ford Acquisition (described below); and

 

·continued to evaluate options to realize the value of their undeveloped acreage through either alternative sources of capital (including farmouts, production payments and joint ventures) or potential monetization of acreage.

 

(b)       RBL Credit Agreement Amendment

 

In April 2016, the Debtors amended the RBL Credit Agreement in order to ease leverage covenants and add an interest coverage ratio (the “Ninth RBL Amendment”). Specifically, the Ninth RBL Amendment:

 

·decreased the borrowing base under the RBL Facility to $450 million;

 

·changed the senior secured funded debt to EBITDAX ratio covenant in the RBL Facility to be no greater than (a) for the fiscal quarters ending March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, 3.0 to 1.0, (b) for the fiscal quarters ending March 31, 2017 and June 30, 2017, 3.5 to 1.0, and (c) for the fiscal quarter ending September 30, 2017 and December 31, 2017, 4.0 to 1.0;

 

·changed the total funded debt to EBITDAX ratio covenant to be no greater than (a) for the fiscal quarters ending March 31, 2018, 5.50 to 1.0, (b) for the fiscal quarters ending June 30, 2018 and September 30, 2018, 5.25 to 1.0, and (c) for the fiscal quarter ending December 31, 2018 and thereafter, 4.25 to 1.0;

 

·added an EBITDAX to cash interest expense ratio covenant to be no less than (a) for the fiscal quarters ending March 31, 2016, June 30, 2016 and September 30, 2016, 2.5 to 1.0, (b) for the fiscal quarters ending December 31, 2016, March 31, 2017 and June 30, 2017, 2.0 to 1.0, and (c) for the fiscal quarter ending September 30, 2017 and thereafter, 1.5 to 1.0;

 

·allowed for up to $35 million of cash, reduced dollar for dollar by the amount of any quarterly distributions for the remainder of 2016, to be used for the redemption of the Senior Notes; and

 

·limited cash held by the Debtors to the greater of 5 percent of the current borrowing base or $30 million.

 

In October 2017, the Debtors amended the RBL Credit Agreement further (the “Tenth RBL Amendment”) to allow the Debtors to pledge additional assets as collateral under the RBL Credit Agreement. Specifically, the Tenth RBL Amendment:

 

·provided for additional pledges of collateral at each redetermination of the borrowing base under the RBL Facility in the event that the Debtors’ currently pledged assets do not represent at least 95% of the total values of the oil and gas properties evaluated in the Debtors’ most recent reserve report; and

 

·provided for the execution of deposit control agreements for the Debtors’ then unencumbered deposit and securities accounts.

 

(c)       Asset Divestitures and Acquisitions

 

In December 2016, the Debtors sold a portion of their Debtor Reserves in the Barnett Shale for $52.1 million (before post-closing adjustments), which proceeds were then deposited with a qualified intermediary to facilitate a like-kind exchange transaction pursuant to Section 1031 of the Internal Revenue Code. On January, 31, 2017, the Debtors used these funds (along with an additional $6.6 million in borrowings under the RBL Facility) to acquire a 5.8 percent working interest in 9,151 gross acres (529 net acres) in Karnes County, TX for $58.7 million (before post-closing purchase price adjustments).

 

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C.       Organizational Changes

 

Anticipating the need for a potential restructuring in the near future given the Debtors’ liquidity constraints, on November 28, 2017, the Board of Directors (the “Board”) of Debtor EV Management, unanimously (1) approved an increase in the size of the Board from eight members to nine members, and (2) ratified and approved the appointment of Daniel J. Churay as an additional independent director of EV Management, to fill the newly created directorship. In addition, Mr. Churay was added to the Compensation Committee and the Conflicts Committee of the Board.

 

D.       The RSA

 

On March 13, 2018, the Debtors entered into the RSA with the Consenting Noteholders, the Consenting RBL Lenders and the Enervest Parties. Under the RSA (as implemented through the Plan), the Debtors will emerge from the Chapter 11 Cases as a standalone enterprise with equity value owned 95 percent by the Senior Noteholders and 5 percent by the holders of Existing EVEP Equity Interests (in each case subject to dilution by the MIP Shares and New Common Stock issued pursuant to the New Warrants). The holders of Existing EVEP Equity Interests will also receive New Warrants for 8 percent of the New Common Stock (subject to dilution by the MIP Shares). The RSA, is attached as Exhibit B hereto.

 

VI.other key aspects of the plan

 

A.       Provisions for Implementation of the Plan

 

(1)Restructuring Transactions

 

The following transactions (together with any other transactions described in, approved by, contemplated by, or necessary to effectuate the RSA and the Plan, the “Restructuring Transactions”) shall occur:

 

·On the Effective Date: (a) the Contributing Noteholders will contribute all of their Contributed Senior Notes Claims to EV NewCo Parent, in exchange for New Common Stock representing in the aggregate all of the then outstanding New Common Stock (each Contributing Noteholder will receive its Pro Rata share of the New Common Stock); (b) EV Midstream, LP (which will make a “check the box” election to be taxed as a corporation subsequent to the transfer of its equity to EV NewCo Acquisition) will transfer $790,000 to EV NewCo Parent in exchange for 79 percent of New Class A Preferred; and (c) the remaining 21 percent of the New Class A Preferred will be distributed to one or more employees of the Reorganized Debtors (or EnerVest) and/or members of the New Board that do not own any Existing Equity Interests, as determined by the Debtors and the Required Consenting Noteholders. The New Class A Preferred is expected to be issued in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, under section 1145 of the Bankruptcy Code, or to the extent unavailable, another available exemption from registration.

 

·In connection with the prior step, EV NewCo Parent will contribute to EV NewCo Acquisition (x) the Contributed Senior Notes Claims; (y) an amount of New Common Stock sufficient to satisfy the Allowed Senior Notes Claims, other than Contributed Senior Notes Claims, and Allowed Existing EVEP Equity Interests in accordance with the treatment section of the Plan; and (z) New Warrants, in exchange for common stock in EV NewCo Acquisition representing in the aggregate all of the then outstanding common stock of EV NewCo Acquisition.

 

·On the Effective Date, EV NewCo Acquisition will acquire all of the assets of EVEP in exchange for (a) full and final satisfaction of the Contributed Senior Notes Claims, (b) the New Common Stock, and (c) the New Warrants.

 

·On the Effective Date, in accordance with the treatment section of the Plan, EVEP will distribute to the Remaining Senior Noteholders New Common Stock in exchange for full and final satisfaction of the Senior Notes Claims held by the Remaining Senior Noteholders.

 

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·On the Effective Date, in accordance with the treatment section of the Plan, EVEP will distribute the (x) New Common Stock and (y) New Warrants, in liquidation of all Existing EVEP Equity Interests.

 

·After the Effective Date, EV NewCo Parent will grant equity-based awards based on New Common Stock (MIP Shares) in accordance with the Management Incentive Plan.

 

At the conclusion of the Restructuring Transactions, the Senior Noteholders will directly own 95 percent of the New Common Stock and the holders of Existing Equity Interests will own 5 percent of the New Common Stock, subject in each case to dilution by the MIP Shares and the New Common Stock issued in respect of the New Warrants.

 

On or about the Effective Date, the Debtors or the Reorganized Debtors, as applicable shall take all actions as may be necessary or appropriate to effectuate the Restructuring Transactions, including: (a) the execution and delivery of any appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, formation, organization, dissolution, or liquidation containing terms that are consistent with the terms of the Plan, and that satisfy the requirements of applicable law and any other terms to which the applicable Entities may agree, including, but not limited to the documents comprising the Plan Supplement; (b) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any asset, property, right, liability, debt, or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable Entities agree; (c) the filing of appropriate certificates or articles of incorporation, reincorporation, merger, consolidation, conversion, or dissolution pursuant to applicable state law; (d) such other transactions that are required to effectuate the Restructuring Transactions in the most tax efficient manner, including any contributions, mergers, consolidations, restructurings, conversions, dispositions, transfers, formations, organizations, dissolutions or liquidations; (e) the execution, delivery, and filing, if applicable, of the Exit Facilities Documents, the New Warrant Agreement, and the Registration Rights Agreements; (f) the adoption of the Management Incentive Plan, the reservation of the MIP Shares, and the grant of the Initial MIP Allocation, in each case, on the terms and conditions set by the New Board as soon as practicable after the Effective Date consistent with the MIP Term Sheet; and (g) all other actions that the applicable Entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law.

 

(2)Sources of Consideration for Plan Distributions

 

The Reorganized Debtors shall fund distributions under the Plan as follows:

 

(a)       Cash on Hand

 

The Reorganized Debtors shall use Cash on hand to fund distributions to certain holders of Claims against the Debtors.

 

(b)       New Common Stock and New Warrants

 

On or as reasonably practicable after the Effective Date, EV NewCo Parent shall issue and distribute the New Common Stock and the New Warrants, to holders of Allowed Senior Notes Claims and Allowed Interests entitled to receive New Common Stock and New Warrants, pursuant to the Plan. The issuance of the New Common Stock, including the MIP Shares and the New Warrant Equity, and the New Warrants shall be authorized without the need for any further corporate action and without any further action by the Debtors, the Reorganized Debtors or EV NewCo Parent, or by holders of Allowed Senior Notes Claims or Allowed Interests. EV NewCo Parent’s New Organizational Documents shall authorize the issuance and distribution on the Effective Date of the New Common Stock and the New Warrants, to the applicable Distribution Agent for the benefit of holders of Allowed Claims and Allowed Interests in Class 4 and Class 6 (as applicable) in accordance with the terms of Article III of the Plan. All New Common Stock issued under the Plan, including the New Warrant Equity, shall be duly authorized, validly issued, fully paid, and non-assessable, and the holders of the New Warrants shall be deemed to be a party to, and bound by, the terms of the New Warrant Agreement (solely in their capacity as warrant holders of EV NewCo Parent) without further action or signature. The Registration Rights Agreement and the New Warrant Agreement shall be effective as of the Effective Date and, as of such date, shall be deemed to be valid, binding, and enforceable in accordance with its terms.

 

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(c)       Exit Facilities

 

On the Effective Date the Reorganized Debtors shall enter into the Exit Facilities, the terms of which, with respect to the Amended RBL Credit Facility, shall include an initial borrowing base of $325,000,000, less the amount of Alternative Term Loans, and the other terms of which will be set forth in the Exit Facilities Documents, as applicable. Confirmation of the Plan shall be deemed approval of the Exit Facilities and the Exit Facilities Documents, as applicable, and all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith, including the payment of all fees, indemnities, and expenses provided for therein, and authorization of the Reorganized Debtors to enter into and execute the Exit Facilities Documents and such other documents as may be required to effectuate the treatment afforded by the Exit Facilities. On the Effective Date, all of the Liens, mortgages and security interests securing the obligations under the RBL Credit Documents as of the Petition Date shall continue to secure the obligations arising under the Amended RBL Credit Agreement and the other Exit Facilities Documents and all such Liens, mortgages and security interests shall be unaltered (and not discharged) by the Plan and shall remain with the same force, priority and effect as existed prior to the Effective Date, provided the Amended RBL Credit Facility Agent may amend existing, or file new, mortgages. On the Effective Date, all such Liens, mortgages and security interests to be granted in accordance with the Exit Facilities Documents (1) shall be deemed to be granted, (2) shall be legal, binding, and enforceable Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the Exit Facilities Documents, (3) shall be deemed perfected on the Effective Date as first priority Liens, mortgages or security interests subject only to such Liens and security interests as may be permitted under the Exit Facilities Documents, and (4) shall not be subject to recharacterization or equitable subordination for any purposes whatsoever and shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy Code or any applicable non-bankruptcy law, based on any facts existing as of the Effective Date. The Reorganized Debtors and the persons and Entities granted such Liens, mortgages and security interests shall be authorized to make all filings and recordings, and to obtain all governmental approvals and consents necessary to establish and perfect such Liens, mortgages and security interests under the provisions of the applicable state, federal, or other law that would be applicable in the absence of the Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation Order and any such filings, recordings, approvals, and consents shall not be required), and will thereafter cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third parties.

 

(d)       New Class A Preferred

 

The New Class A Preferred will: (1) have a cumulative initial face amount of $1,000,000.00; (2) be entitled to a semiannual dividend (which shall be in kind unless EV NewCo Parent elects otherwise) at the annual rate of 5 percent unless mutually agreed otherwise by the Debtors and Required Consenting Noteholders; (3) be entitled to vote to elect one director in the event that dividends with respect to such New Class A Preferred shall not have been paid for a period of two consecutive quarters (it being understood that payment of a dividend in kind shall not be a failure to pay such dividend); (4) shall not be able to be redeemed for a period of at least two years from the Effective Date; (5) shall be optionally redeemable by EV NewCo Parent (at any time after five years from the Effective Date); (6) shall be subject to redemption after 21 years from the Effective Date at the election of the holders; and (7) upon a sale, shall receive par plus any accrued dividends.

 

(3)Vesting of Assets in the Reorganized Debtors

 

Except as otherwise provided in the Plan, or in any agreement, instrument, or other document incorporated in the Plan, on the Effective Date, all property in each Debtor’s Estate, all Causes of Action, all Executory Contracts and Unexpired Leases assumed by any of the Debtors, and any property acquired by any of the Debtors under the Plan shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges, or other encumbrances. On and after the Effective Date, except as otherwise provided herein, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property and pursue, compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

 

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B.       Treatment of Executory Contracts and Unexpired Leases

 

(1)Assumption of Executory Contracts and Unexpired Leases

 

On the Effective Date, except as otherwise provided herein, each Executory Contract and Unexpired Lease shall be deemed assumed by the applicable Debtor, without the need for any further notice to or action, order, or approval of the Bankruptcy Court, as of the Effective Date under section 365 of the Bankruptcy Code, unless such Executory Contract or Unexpired Lease: (a) has been previously assumed or rejected; (b) previously expired or has been terminated pursuant to its own terms; (c) is the subject of a motion or notice to assume or assume and assign Filed on or before the Confirmation Date; or (d) is designated specifically, or by category, on the Schedule of Rejected Executory Contracts and Unexpired Leases. The assumption of Executory Contracts and Unexpired Leases hereunder may include the assignment of certain of such contracts to Affiliates. The Confirmation Order will constitute an order of the Bankruptcy Court approving the above-described assumptions and assignments.

 

To the maximum extent permitted by law, to the extent that any provision in any Executory Contract or Unexpired Lease assumed or assumed and assigned pursuant to the Plan restricts or prevents, or purports to restrict or prevent, or is breached or deemed breached by, the assumption or assumption and assignment of such Executory Contract or Unexpired Lease (including any “change of control” provision), then such provision shall be deemed modified such that the transactions contemplated by the Plan shall not entitle the non-Debtor party thereto to terminate such Executory Contract or Unexpired Lease or to exercise any other default-related rights with respect thereto.

 

Except as otherwise provided herein or agreed to by the Debtors and the applicable counterparty, each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests. Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.

 

(2)Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

 

Any monetary amounts by which any Executory Contract or Unexpired Lease to be assumed hereunder is in default shall be satisfied, under section 365(b)(1) of the Bankruptcy Code, by the Reorganized Debtors upon assumption thereof in the ordinary course of business. If the counterparty to an Executory Contract or Unexpired Lease that, after the Petition Date, received a notice of the Debtors’ intention to assume such Executory Contract or Unexpired Lease, believes any amounts are due as a result of the Debtors’ default under the obligations of such Executory Contract or Unexpired Lease, it shall assert a Cure Claim against the Debtors or Reorganized Debtors, as applicable, in the ordinary course of business, subject to all defenses the Debtors or Reorganized Debtors may have with respect to such Cure Claim. Any Cure Claim shall be deemed fully satisfied, released, and discharged upon payment by the Debtors or the Reorganized Debtors of the applicable Cure Claim; provided that nothing herein shall prevent the Reorganized Debtors from paying any Cure Claim despite the failure of the relevant counterparty to file such request for payment of such Cure Claim. The Debtors, with the consent of the Required Consenting Noteholders, or the Reorganized Debtors, as applicable, may settle any Cure Claims without any further notice to or action, order, or approval of the Bankruptcy Court.

 

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As set forth in the notice of the Debtors’ intention to assume Executory Contracts or Unexpired Leases, any objection to the assumption of an Executory Contract or Unexpired Lease under the Plan, including an objection regarding the ability of the Reorganized Debtors to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code), must have been filed with the Bankruptcy Court by the deadline set by the Bankruptcy Court for objecting to Confirmation of the Plan, or such other deadline as may have been established by order of the Bankruptcy Court. To the extent any such objection was heard by the Bankruptcy Court at the Confirmation Hearing, such objection may be heard at a subsequent omnibus hearing. Any counterparty to an Executory Contract or Unexpired Lease that did not timely object to the proposed assumption of any Executory Contract or Unexpired Lease by the deadline established by the Bankruptcy Court will be deemed to have consented to such assumption.

 

In the event of a dispute regarding (a) the amount of any Cure Claim, (b) the ability of the Reorganized Debtors to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed, or (c) any other matter pertaining to assumption or the payment of Cure Claims required by section 365(b)(1) of the Bankruptcy Code, payment of a Cure Claim, if any, shall occur as soon as reasonably practicable after entry of a Final Order or Final Orders resolving such dispute and approving such assumption. The Debtors (with the consent of the Required Consenting Noteholders), or Reorganized Debtors, as applicable, reserve the right at any time to move to reject any Executory Contract or Unexpired Lease based upon the existence of any unresolved dispute or upon a resolution of such dispute that is unfavorable to the Debtors or Reorganized Debtors.

 

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise, and full payment of any applicable Cure Claims pursuant to Article V.B of the Plan, shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time prior to the date that the Debtors assume such Executory Contract or Unexpired Lease. Any Proofs of Claim filed with respect to an Executory Contract or Unexpired Lease that has been assumed shall be deemed Disallowed and expunged, without further notice to or action, order, or approval of the Bankruptcy Court.

 

(3)Rejection Damages Claims

 

Each Executory Contract and Unexpired Lease, if any, set forth on the Schedule of Rejected Executory Contracts and Unexpired Leases shall be deemed rejected, without the need for any further notice to or action, order, or approval of the Bankruptcy Court, as of the Effective Date under section 365 of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, or supplement the Schedule of Rejected Executory Contracts and Unexpired Leases at any time through and including the Effective Date.

 

Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, if any, must be filed with the Bankruptcy Court within 30 days after the date of entry of an order of the Bankruptcy Court (including the Confirmation Order) approving such rejection. Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not Filed within such time will be automatically Disallowed, forever barred from assertion, and shall not be enforceable against, as applicable, the Debtors, the Reorganized Debtors, the Estates, or property of the foregoing parties, without the need for any objection by the Debtors or the Reorganized Debtors, as applicable, or further notice to, or action, order, or approval of the Bankruptcy Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the Schedules or a Proof of Claim to the contrary. Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as General Unsecured Claims and shall be treated in accordance with Article III.B(5) of the Plan.

 

Except as otherwise provided herein or agreed to by the Debtors (with the consent of the Required Consenting Noteholders) and the applicable counterparty, each rejected Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests. Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.

 

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(4)Contracts and Leases After the Petition Date

 

Contracts and leases entered into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed under section 365 of the Bankruptcy Code, will be performed by the applicable Debtor or Reorganized Debtor liable thereunder in the ordinary course of its business. Such contracts and leases that are not rejected under the Plan shall survive and remain unaffected by entry of the Confirmation Order.

 

(5)Reservation of Rights

 

Nothing contained in the Plan or the Plan Supplement shall constitute an admission by the Debtors or any other party that any contract or lease is in fact an Executory Contract or Unexpired Lease or that any Debtor or Reorganized Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors or the Reorganized Debtors, as applicable, shall have 45 days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

 

C.       Provisions Governing Distributions

 

One of the key concepts under the Bankruptcy Code is that only claims and interests that are “allowed” may receive distributions under a chapter 11 plan. This term is used throughout the Plan and the descriptions below. In general, an Allowed Claim or Interest means that the Debtors agree, or if there is a dispute, the Bankruptcy Court determines, that the Claim or Interest, and the amount thereof, is in fact a valid obligation of or Interest in the Debtors.

 

(1)Timing and Calculation of Amounts to Be Distributed

 

Unless otherwise provided in the Plan, on the Effective Date or as soon as reasonably practicable thereafter (or, if a Claim is not an Allowed Claim on the Effective Date, on the date that such Claim becomes Allowed or as soon as reasonably practicable thereafter), each Holder of an Allowed Claim shall receive the full amount of the distributions that the Plan provides for Allowed Claims in each applicable Class. In the event that any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date. If and to the extent that there are Disputed Claims, distributions on account of any such Disputed Claims shall be made pursuant to the provisions set forth in Article VII of the Plan. Except as otherwise provided in the Plan, holders of Claims shall not be entitled to interest, dividends, or accruals on the distributions provided for in the Plan, regardless of whether such distributions are delivered on or at any time after the Effective Date.

 

On the Effective Date, or as soon as reasonably practicable thereafter, the Reorganized Debtors shall distribute the New Common Stock pursuant to the terms set forth in the Plan.

 

(2)Distributions to Be Made Under the Plan

 

Except as otherwise provided in the Plan, all distributions made under the Plan shall be made by the Reorganized Debtors on the Effective Date or as soon as reasonably practicable thereafter, except that distributions to holders of Allowed Claims or Allowed Interests governed by a separate agreement and administered by a Servicer shall be deposited with the appropriate Servicer, at which time such distributions shall be deemed complete, and the Servicer shall deliver such distributions in accordance with the Plan and the terms of the governing agreement; provided that New Common Stock and New Warrants shall be distributed by a third-party disbursing agent designated by the Debtors. Distributions to holders of RBL Facility Claims shall only be made to the Holders as of the Distribution Record Date, as determined by the register of the RBL Agent.

 

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The Reorganized Debtors and any Servicer, to the extent it provides services related to distributions pursuant to the Plan, shall only be required to act and make distributions in accordance with the terms of the Plan and shall have no (x) liability for actions taken in accordance with the Plan or in reliance upon information provided to them in accordance with the Plan, or (y) obligation or liability for distributions under the Plan to any party who does not hold an Allowed Claim as of the Distribution Record Date or who does not otherwise comply with the terms of the Plan.

 

To the extent a Servicer provides services related to distributions pursuant to the Plan, it shall be entitled to reasonable and customary compensation from the Reorganization Debtors for such services and reimbursement for reasonable and customary expenses incurred in connection with such services.

 

(3)Delivery of Distributions and Undeliverable or Unclaimed Distributions

 

(a)       Delivery of Distributions

 

i.       Delivery of Distributions to the RBL Agent

 

Except as otherwise provided in the Plan, all distributions to holders of RBL Facility Claims shall be governed by the RBL Credit Agreement and shall be deemed completed when made to the RBL Agent, which shall be deemed to be the holder of all RBL Facility Claims for purposes of distributions to be made hereunder. The RBL Agent shall hold or direct such distributions for the benefit of the holders of Allowed RBL Facility Claims, as applicable. As soon as practicable in accordance with the requirements set forth in Article VI of the Plan, the RBL Agent shall arrange to deliver such distributions to or on behalf of such holders of Allowed RBL Facility Claims.

 

ii.       Delivery of Distributions to the Indenture Trustee

 

Except as otherwise provided in the Plan, all distributions to holders of Senior Notes Claims shall be governed by the Indenture and shall be deemed completed when made to the Indenture Trustee, which shall be deemed to be the holder of all Senior Notes Claims for purposes of distributions to be made hereunder. The Indenture Trustee shall hold or direct such distributions for the benefit of the holders of Allowed Senior Notes Claims, as applicable. As soon as practicable in accordance with the requirements set forth in Article VI of the Plan, the Indenture Trustee shall arrange to deliver such distributions to or on behalf of such holders of Allowed Senior Notes Claims. Notwithstanding anything to the contrary in the Plan, the distribution of New Common Stock shall be made through the facilities of DTC in accordance with the customary practices of DTC for a mandatory distribution, as and to the extent practicable, and the Distribution Record Date shall not apply. In connection with such distribution, the Indenture Trustee shall deliver instructions to DTC instructing DTC to effect distributions on a Pro Rata basis as provided under the Plan with respect to the Senior Notes Claims.

 

iii.       Delivery of New Warrants

 

Notwithstanding anything to the contrary in the Plan, the distribution of New Warrants (provided the New Warrants are DTC-eligible and the Debtors elect, subject to approval by the Required Consenting Noteholders, to deliver such New Warrants through the facilities of DTC) shall be made through the facilities of DTC in accordance with the customary practices of DTC for a mandatory distribution, as and to the extent practicable, and the Distribution Record Date shall not apply. To the extent the New Warrants are not delivered through the facilities of DTC, the Debtors shall facilitate registration of the New Warrants into the names of the relevant beneficial owners as soon as practicable following the Effective Date.

 

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iv.       Delivery of Distributions in General

 

Except as otherwise provided in the Plan, distributions to holders of Allowed Claims (other than holders of RBL Facility Claims or Senior Notes Claims) or Interests shall be made to holders of record as of the Distribution Record Date by the Reorganized Debtors or a Servicer, as appropriate: (1) to the signatory set forth on any of the Proofs of Claim Filed by such holder or other representative identified therein (or at the last known addresses of such holder if no Proof of Claim is Filed or if the Debtors have been notified in writing of a change of address on or before the date that is 10 days before the Effective Date); (2) at the addresses set forth in any written notices of address changes delivered to the Reorganized Debtors after the date of any related Proof of Claim; (3) at the addresses reflected in the Schedules if no Proof of Claim has been Filed and the Reorganized Debtors have not received a written notice of a change of address on or before the date that is 10 days before the Effective Date; or (4) on any counsel that has appeared in the Chapter 11 Cases on the holder’s behalf. Subject to Article VI, distributions under the Plan on account of Allowed Claims shall not be subject to levy, garnishment, attachment, or like legal process, so that each holder of an Allowed Claim shall have and receive the benefit of the distributions in the manner set forth in the Plan. The Debtors, the Reorganized Debtors, or any Servicer making distributions shall not incur any liability whatsoever on account of any distributions under the Plan except for gross negligence or willful misconduct.

 

(b)       Undeliverable Distributions and Unclaimed Property

 

In the event that any distribution to any holder is returned as undeliverable, no distribution to such holder shall be made unless and until the Reorganized Debtors have determined the then-current address of such holder, at which time such distribution shall be made to such holder without interest; provided that such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of one year from the Effective Date. After such date, all unclaimed property or interests in property shall be redistributed Pro Rata as provided under the Plan (it being understood that, for purposes of Article VI.C(3) of the Plan, “Pro Rata” shall be determined as if the Claim underlying such unclaimed distribution had been Disallowed) and all other unclaimed property or interests in property shall revert to the Reorganized Debtors without need for a further order by the Bankruptcy Court (notwithstanding any applicable federal, provincial, or state escheat, abandoned, or unclaimed property laws to the contrary), and the Claim of any holder to such property or Interest in property shall be discharged and forever barred.

 

(c)       Allocations

 

Distributions in respect of Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest as Allowed under the Plan.

 

(d)       No Postpetition Interest on Claims

 

Unless otherwise specifically provided for in an order of the Bankruptcy Court, the Plan, or the Confirmation Order, or required by applicable bankruptcy law, postpetition interest shall not accrue or be paid on any Claims or Interests and no holder of a Claim or Interest shall be entitled to interest accruing on or after the Petition Date on any such Claim

 

D.       Procedures for Resolving Disputed Claims and Interests

 

(1)Proofs of Claim / Disputed Claims Process

 

Notwithstanding section 502(a) of the Bankruptcy Code, and in light of the Unimpaired status of all General Unsecured Claims under the Plan, except as required by Article V.C of the Plan, holders of Claims need not file Proofs of Claim, and the Reorganized Debtors and the holders of Claims shall determine, adjudicate, and resolve any disputes over the validity and amounts of such Claims in the ordinary course of business as if the Chapter 11 Cases had not been commenced except that (unless expressly waived pursuant to the Plan) the Allowed amount of such Claims shall be subject to the limitations or maximum amounts permitted by the Bankruptcy Code, including sections 502 and 503 of the Bankruptcy Code, to the extent applicable. All Proofs of Claim filed in these Chapter 11 Cases, except those permitted by Article V.C of the Plan, shall be considered objected to and Disputed without further action by the Debtors. Upon the Effective Date, all Proofs of Claim filed against the Debtors, regardless of the time of filing, and including Proofs of Claim filed after the Effective Date, shall be deemed withdrawn and expunged, other than as provided below. Notwithstanding anything in Article VII.A of the Plan, (a) all Claims against the Debtors that result from the Debtors’ rejection of an Executory Contract or Unexpired Lease, (b) disputes regarding the amount of any Cure pursuant to section 365 of the Bankruptcy Code, and (c) Claims that the Debtors seek to have determined by the Bankruptcy Court, shall in all cases be determined by the Bankruptcy Court.

 

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Except as otherwise specifically provided in the Plan and notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule 9019, after the Effective Date, the Reorganized Debtors by order of the Bankruptcy Court, shall have the sole authority: (a) to File, withdraw, or litigate to judgment objections to Claims; (b) to settle or compromise any Disputed Claim without any further notice to or action, order, or approval by the Bankruptcy Court; and (c) to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval by the Bankruptcy Court.

 

(2)Estimation of Claims

 

Before or after the Effective Date, the Debtors with the consent of the Required Consenting Noteholders (which consent shall not be unreasonably withheld) or the Reorganized Debtors, as applicable, may (but are not required to) at any time request that the Bankruptcy Court estimate any Disputed Claim or Disputed Interest that is contingent or unliquidated pursuant to section 502(c) of the Bankruptcy Code for any reason, regardless of whether any party previously has objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any such Claim, including during the litigation of any objection to any Claim or during the appeal relating to such objection. Notwithstanding any provision otherwise in the Plan, a Claim that has been expunged from the Claims Register, but that has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any Disputed, contingent, or unliquidated Claim, that estimated amount shall constitute a maximum limitation on such Claim for all purposes under the Plan (including for purposes of distributions), and the relevant Debtor may elect to pursue any supplemental proceedings to object to any ultimate distribution on such Claim. If the estimated amount constitutes a maximum limitation on such Claim, the Debtors or the Reorganized Debtors, as applicable, may elect to pursue any supplemental proceedings to object to any ultimate distribution on account of such Claim. Notwithstanding section 502(j) of the Bankruptcy Code, in no event shall any holder of a Claim that has been estimated pursuant to section 502(c) of the Bankruptcy Code or otherwise be entitled to seek reconsideration of such estimation unless such holder has Filed a motion requesting the right to seek such reconsideration on or before 21 days after the date on which such Claim is estimated. All of the aforementioned Claims and objection, estimation, and resolution procedures are cumulative and not exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn, or resolved by any mechanism approved by the Bankruptcy Court.

 

(3)Objections to Claims

 

Except insofar as a Claim is Allowed under the Plan, the Debtors, the Reorganized Debtors, or any other party in interest shall be entitled to object to Claims. Any objections to Claims shall be served and filed (a) on or before the 180th day following the later of (i) the Effective Date and (ii) the date that a Proof of Claim is filed or amended or a Claim is otherwise asserted or amended in writing by or on behalf of a holder of such Claim, or (b) such later date as ordered by the Bankruptcy Court upon motion filed by the Debtors or Reorganized Debtors. For the avoidance of doubt, except as otherwise provided herein, from and after the Effective Date, each Reorganized Debtor shall have and retain any and all rights and defenses such Debtor had immediately prior to the Effective Date with respect to any Disputed Claim or Interest, including the Causes of Action retained pursuant to Article IV.O of the Plan.

 

(4)No Distribution Pending Allowance

 

If an objection to a Claim is deemed, as set forth in Article VII.A of the Plan, or filed, as set forth in Article VII.B of the Plan, no payment or distribution provided under the Plan shall be made on account of such Claim unless and until such Disputed Claim becomes an Allowed Claim.

 

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(5)Distribution After Allowance

 

To the extent that a Disputed Claim ultimately becomes an Allowed Claim, distributions (if any) shall be made to the holder of such Allowed Claim in accordance with the provisions of the Plan. As soon as practicable after the date that the order or judgment of the Bankruptcy Court allowing any Disputed Claim becomes a Final Order, the Distribution Agent shall provide to the holder of such Claim the distribution (if any) to which such holder is entitled under the Plan as of the Effective Date, without any interest to be paid on account of the such Claim unless required under applicable bankruptcy law.

 

(6)Adjustment to Claims Register Without Objection

 

Any Claim that has been paid or satisfied, or any Claim that has been amended or superseded, may be adjusted or expunged on the Claims Register by the Debtors or the Reorganized Debtors without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

 

(7)Disallowance of Claims

 

All Claims and Interests of any Entity from which property is sought by the Debtors under sections 542, 543, 550, or 553 of the Bankruptcy Code or that the Debtors or the Reorganized Debtors allege is a transferee of a transfer that is avoidable under sections 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code shall be disallowed if: (i) the Entity, on the one hand, and the Debtors or the Reorganized Debtors, as applicable, on the other hand, agree or the Bankruptcy Court has determined by Final Order that such Entity or transferee is liable to turn over any property or monies under any of the aforementioned sections of the Bankruptcy Code; and (ii) such Entity or transferee has failed to turn over such property by the date set forth in such agreement or Final Order.

 

(8)Single Satisfaction of Claims

 

Holders of Allowed Claims may assert such Claims against each Debtor obligated with respect to such Claims, and such Claims shall be entitled to share in the recovery provided for the applicable Class of Claims against each obligated Debtor based upon the full Allowed amount of such Claims. Notwithstanding the foregoing, in no case shall the aggregate value of all property received or retained under the Plan on account of any Allowed Claim exceed 100 percent of the underlying Allowed Claim plus applicable interest, if any.

 

E.       Release, Injunction, and Related Provisions

 

(1)Discharge of Claims and Termination of Interests

 

Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan or in any contract, instrument, or other agreement or document created pursuant to the Plan, the distributions, rights, and treatment that are provided in the Plan shall be in complete satisfaction, discharge, and release, effective as of the Effective Date, of Claims (including any Intercompany Claims resolved or compromised after the Effective Date by the Reorganized Debtors), Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, liens on, obligations of, rights against, and interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not: (a) a Proof of Claim based upon such debt or right is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code; (b) a Claim or Interest based upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (c) the holder of such a Claim or Interest has accepted the Plan. Any default or “event of default” by the Debtors or Affiliates with respect to any Claim or Interest that existed immediately before or on account of the Filing of the Chapter 11 Cases shall be deemed cured (and no longer continuing) as of the Effective Date. The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the Effective Date occurring.

 

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(2)Releases by the Debtors

 

Pursuant to section 1123(b) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan, on and after the Effective Date, the Released Parties shall be deemed released and discharged by the Debtors, their estates, and the Reorganized Debtors from any and all claims, obligations, debts, rights, suits, damages, causes of action, remedies, and liabilities whatsoever, including any derivative claims asserted on behalf of the Debtors or Reorganized Debtors, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that the Debtors, their respective estates or the Reorganized Debtors would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Interest or other entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, the restructuring, the Restructuring Transactions, the Chapter 11 Cases, the purchase, sale, or rescission of the purchase or sale of any security or loans of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims and Interests prior to or in the Chapter 11 Cases, the RSA, the negotiation, formulation, or preparation of the Plan, the Disclosure Statement, the Exit Facilities Documents, or any other Restructuring Documents, any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, other than claims or liabilities arising out of or relating to any act or omission of a Released Party that constitutes fraud, willful misconduct or gross negligence; provided that the foregoing shall not operate to waive and release any claims, obligations, debts, rights, suits, damages, causes of action, or remedies of the Debtors or Reorganized Debtors (a) expressly preserved by the Plan or (b) arising after the Effective Date under or related to any agreements or documents executed to implement the Plan and the restructuring or assumed pursuant to the Plan.

 

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Debtor Release, which includes by reference each of the related provisions and definitions contained in the Plan, and further, shall constitute the Bankruptcy Court’s finding that the Debtor Release is: (a) in exchange for the good and valuable consideration provided by the Released Parties; (b) a good-faith settlement and compromise of the Claims released by the Debtor Release; (c) in the best interests of the Debtors and all holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice and opportunity for hearing; and (f) a bar to any of the Debtors, the Reorganized Debtors, or the Debtors’ Estates asserting any Claim or Cause of Action released pursuant to the Debtor Release.

 

(3)Releases by Holders of Claims and Interests

 

As of the Effective Date, the Releasing Parties shall be deemed to have conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged the Debtors, the Reorganized Debtors and the Released Parties from any and all claims, obligations, debts, rights, suits, damages, causes of action, remedies, and liabilities whatsoever, including any derivative claims asserted on behalf of a Debtor or Reorganized Debtor, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, the restructuring, the Restructuring Transactions, the Chapter 11 Cases, the RSA, the purchase, sale, or rescission of the purchase or sale of any security or loans of the Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims and Interests prior to or in the Chapter 11 Cases, the negotiation, formulation, or preparation of the Plan, the Disclosure Statement, the Exit Facilities Documents or any other Restructuring Documents, any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, other than claims or liabilities arising out of or relating to any act or omission of a Released Party that constitutes fraud, willful misconduct or gross negligence; provided that the foregoing shall not operate to waive and release any claims, obligations, debts, rights, suits, damages, causes of action, or remedies of the Debtors or Reorganized Debtors (x) expressly preserved by the Plan or (y) arising after the Effective Date under or related to any agreements or documents executed to implement the Plan and the Restructuring or assumed pursuant to the Plan.

 

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Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Third-Party Release, which includes by reference each of the related provisions and definitions contained herein, and, further, shall constitute the Bankruptcy Court’s finding that the Third Party Release is: (a) consensual; (b) essential to the confirmation of the Plan; (c) given in exchange for the good and valuable consideration provided by the Released Parties; (d) a good-faith settlement and compromise of the Claims released by the Third-Party Release; (e) in the best interests of the Debtors and their Estates; (f) fair, equitable, and reasonable; (g) given and made after due notice and opportunity for hearing; and (h) a bar to any of the Releasing Parties asserting any claim or Cause of Action released pursuant to the Third-Party Release.

 

(4)Exculpation

 

Upon and effective as of the Effective Date, the Debtors and their directors, officers, employees, attorneys, investment bankers, financial advisors, restructuring consultants, and other professional advisors and agents will be deemed to have solicited acceptances of the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, including section 1125(e) of the Bankruptcy Code.

 

Except as otherwise specifically provided in the Plan, no Exculpated Party shall have or incur, and each Exculpated Party is hereby released and exculpated from any Exculpated Claim; provided that the foregoing “Exculpation” shall have no effect on the liability of any entity that results from any such act or omission that is determined by a Final Order to have constituted actual fraud, gross negligence, or willful misconduct. The Exculpated Parties have participated in any and all activities potentially underlying any Exculpated Claim in good faith and in compliance with the applicable laws.

 

(5)Injunction

 

Except as otherwise expressly provided in the Plan or for obligations issued or required to be paid pursuant to the Plan or Confirmation Order, all Entities who have held, hold, or may hold Claims or Interests that have been released pursuant to Article VIII.C or Article VIII.D of the Plan, discharged pursuant to Article VIII.B of the Plan, or are subject to exculpation pursuant to Article VIII.E of the Plan, are permanently enjoined, from and after the Effective Date, from taking any of the following actions against, as applicable, the Debtors, the Reorganized Debtors, the Released Parties, or the Exculpated Parties: (a) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims or Interests; (b) enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against such Entities on account of or in connection with or with respect to any such Claims or Interests; (c) creating, perfecting, or enforcing any Lien or encumbrance of any kind against such Entities or the property or the estates of such Entities on account of or in connection with or with respect to any such Claims or Interests; (d) asserting any right of setoff, subrogation, or recoupment of any kind against any obligation due from such Entities or against the property of such Entities on account of or in connection with or with respect to any such Claims or Interests; and (e) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such claims or interests released or settled pursuant to the Plan. Notwithstanding anything to the contrary in the foregoing, the injunction does not enjoin any party under the Plan or under any document, instrument, or agreement (including those attached to the Disclosure Statement or set forth in the Plan Supplement) executed to implement the Plan from bringing an action to enforce the terms of the Plan or such document, instrument, or agreement (including those attached to the Disclosure Statement or set forth in the Plan Supplement) executed to implement the Plan.

 

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(6)Protection Against Discriminatory Treatment

 

In accordance with section 525 of the Bankruptcy Code, and consistent with Article VI of the United States Constitution, no Governmental Unit shall discriminate against any Reorganized Debtor, or any Entity with which a Reorganized Debtor has been or is associated, solely because such Reorganized Debtor was a Debtor under chapter 11, may have been insolvent before the commencement of the Chapter 11 Cases (or during the Chapter 11 Cases but before such Debtor was granted or denied a discharge), or has not paid a debt that is dischargeable in the Chapter 11 Cases.

 

(7)Release of Liens

 

Except as otherwise specifically provided in the Plan, the Exit Facilities Documents (including in connection with any express written amendment of any mortgage, deed of trust, Lien, pledge, or other security interest under the Exit Facilities Documents), or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully released and discharged, and all of the right, title, and interest of any holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the Reorganized Debtors and their successors and assigns, in each case, without any further approval or order of the Bankruptcy Court and without any action or Filing being required to be made by the Debtors, the RBL Agent, or any other holder of a Secured Claim. In addition, at the sole expense of the Debtors or the Reorganized Debtors, the RBL Agent shall execute and deliver all documents reasonably requested by the Debtors, Reorganized Debtors or administrative agent(s) for the Exit Facilities to evidence the release of such mortgages, deeds of trust, Liens, pledges, and other security interests and shall authorize the Reorganized Debtors and their designees to file UCC-3 termination statements and other release documentation (to the extent applicable) with respect thereto.

 

(8)Reimbursement or Contribution

 

If the Bankruptcy Court disallows a Claim for reimbursement or contribution of an Entity pursuant to section 502(e)(1)(B) of the Bankruptcy Code, then to the extent that such Claim is contingent as of the Effective Date, such Claim shall be forever Disallowed notwithstanding section 502(j) of the Bankruptcy Code, unless prior to the Effective Date (a) such Claim has been adjudicated as noncontingent, or (b) the relevant holder of a Claim has filed a noncontingent Proof of Claim on account of such Claim and a Final Order has been entered determining such Claim as no longer contingent.

 

(9)Recoupment

 

In no event shall any holder of a Claim be entitled to recoup such Claim against any Claim, right, or Cause of Action of the Debtors or the Reorganized Debtors, as applicable, unless such holder actually has performed such recoupment and provided notice thereof in writing to the Debtors on or before the Confirmation Date, notwithstanding any indication in any Proof of Claim or otherwise that such holder asserts, has, or intends to preserve any right of recoupment.

 

(10)Subordination Rights

 

Any distributions under the Plan to holders of Claims or Interests shall be received and retained free from any obligations to hold or transfer the same to any other holder and shall not be subject to levy, garnishment, attachment, or other legal process by any holder by reason of claimed contractual subordination rights. On the Effective Date, any such subordination rights shall be deemed waived, and the Confirmation Order shall constitute an injunction enjoining any Entity from enforcing or attempting to enforce any contractual, legal, or equitable subordination rights to property distributed under the Plan, in each case other than as provided in the Plan; provided that any such subordination rights shall be preserved in the event the Confirmation Order is vacated, the Effective Date does not occur in accordance with the terms hereunder, or the Plan is revoked or withdrawn.

 

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F.       Modification, Revocation, or Withdrawal of the Plan

 

(1)Modification of Plan

 

Subject to the limitations contained in the Plan, and subject to the terms of the RSA, and with the consent of the Required Consenting Noteholders and the Required Consenting RBL Lenders, and the RBL Agent (to the extent such modification directly and adversely affects its rights under the Plan) the Debtors reserve the right to modify the Plan and seek Confirmation consistent with the Bankruptcy Code and the Bankruptcy Rules and, as appropriate, not resolicit votes on such modified Plan. Subject to certain restrictions and requirements set forth in section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Plan, and the consent of the Required Consenting Noteholders and the Required Consenting RBL Lenders, the Debtors expressly reserve their rights to alter, amend, or modify materially the Plan with respect to the Debtors, one or more times, after Confirmation, and, to the extent necessary, may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan.

 

(2)Effect of Confirmation on Modifications

 

Entry of the Confirmation Order shall constitute approval of all modifications to the Plan occurring after the solicitation of votes thereon pursuant to section 1127(a) of the Bankruptcy Code and a finding that such modifications to the Plan do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.

 

(3)Revocation or Withdrawal of Plan

 

The Debtors reserve the right (subject to the terms of the RSA) to revoke or withdraw the Plan with respect to any or all Debtors before the Confirmation Date and to file subsequent chapter 11 plans. If the Debtors revoke or withdraw the Plan, or if Confirmation or the Effective Date does not occur, then: (a) the Plan will be null and void in all respects; (b) any settlement or compromise embodied in the Plan, assumption or rejection of Executory Contracts or Unexpired Leases effectuated by the Plan, and any document or agreement executed pursuant hereto will be null and void in all respects; and (c) nothing contained in the Plan shall (i) constitute a waiver or release of any Claims, Interests, or Causes of Action by any Entity, (ii) prejudice in any manner the rights of any Debtor or any other Entity, or (iii) constitute an admission, acknowledgement, offer, or undertaking of any sort by any Debtor or any other Entity.

 

G.       Reservation of Rights

 

The Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. None of the filing of the Plan, any statement or provision contained in the Plan, or the taking of any action by any Debtor with respect to the Plan, the Disclosure Statement, or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of any Debtor with respect to the holders of Claims or Interests prior to the Effective Date.

 

H.       Plan Supplement Exhibits

 

All exhibits and documents included in the Plan Supplement are incorporated into and are a part of the Plan as if set forth in full in the Plan. After any of such documents included in the Plan Supplement are filed, copies of such documents shall be made available upon written request to the Debtors’ counsel at the address above or by downloading such exhibits and documents from the Solicitation Agent’s website at https://cases.primeclerk.com/evep or the Bankruptcy Court’s website at https://www.pacer.gov/.

 

I.       Conditions Precedent to the Effective Date

 

It shall be a condition to the Effective Date that the following conditions shall have been satisfied or waived pursuant to Article IX.B of the Plan:

 

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(a)       the Amended RBL Credit Agreement, all documentation related thereto, shall be in form and substance consistent with the Amended RBL Credit Agreement Term Sheet and otherwise in form and substance acceptable to the Debtors, the Required Consenting RBL Lenders, the Amended RBL Credit Facility Agent and the Required Consenting Noteholders;

 

(b)       the New Omnibus Agreement shall be in form and substance acceptable to the Debtors, the Required Consenting Noteholders and the EnerVest Parties, and shall also be subject to the consent of the RBL Agent (which consent shall not be unreasonably withheld);

 

(c)       the joint operating agreements and other operating agreements to which the Debtors are currently a party shall be modified in a manner in form and substance acceptable to the Debtors and the Required Consenting Noteholders, and which modifications, if any, shall also be subject to the consent of the RBL Agent (which consent shall not be unreasonably withheld);

 

(d)       the New Warrants and the New Warrants Agreement shall be in form and substance acceptable to the Debtors, the Required Consenting Noteholders and the EnerVest Parties;

 

(e)       the New Organizational Documents and any other organizational documents for the Reorganized Debtors, including the Registration Rights Agreement, shall be in form and substance acceptable to the Required Consenting Noteholders in their sole discretion; provided that the documents referred to in this clause (e) shall also be subject to the consent of the Debtors (which consent shall not be unreasonably withheld);

 

(f)       the Bankruptcy Court shall have entered the Disclosure Statement Order, in form and substance acceptable to the Debtors, the Required Consenting Noteholders, and the Required Consenting RBL Lenders;

 

(g)       the Bankruptcy Court shall have entered the Confirmation Order in form and substance acceptable to the Debtors, the Required Consenting Noteholders, and the Required Consenting RBL Lenders, which order shall have become a Final Order that is not stayed;

 

(h)       the Debtors shall have paid the Restructuring Expenses, including estimated fees and expenses to be incurred through the Effective Date, in full, in Cash; and

 

(i)       the Debtors shall have received all governmental or other approvals required to effectuate the terms of the Plan.

 

J.       Waiver of Conditions Precedent

 

The Debtors, with the prior consent of the Required Consenting Noteholders, the Required Consenting RBL Lenders (solely with respect to the conditions to the Effective Date set forth in Articles IX.A.1, 6, 7, and 9 of the Plan), the RBL Agent (solely with respect to the conditions to the Effective Date set forth in Articles IX.A.2, 3, and 8) and the EnerVest Parties (solely with respect to the conditions to the Effective Date set forth in Articles IX.A.2 and 4 of the Plan) may waive any of the conditions to the Effective Date set forth in Article IX.A of the Plan at any time without any notice to other parties in interest and without further notice to or action, order, or approval of the Bankruptcy Court, and without any formal action other than proceedings to confirm or consummate the Plan, subject to the terms of the Bankruptcy Code and the Bankruptcy Rules.

 

K.       Effect of Non-Occurrence of Conditions to Consummation

 

If prior to Consummation, the Confirmation Order is vacated pursuant to a Final Order, then, except as provided in such Final Order, the Plan will be null and void in all respects, and nothing contained in the Plan, the Disclosure Statement, or the RSA shall: (1) constitute a waiver or release of any Claims, Interests, or Causes of Action by an Entity; (2) prejudice in any manner the rights of any Debtor or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking of any sort by any Debtor or any other Entity.

 

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VII.RISK FACTORS