* Requisite lenders and equity holders enter into lock-up agreement to support
chapter 11 plan
* Cash on hand will support restructuring and operations
* Operations will continue without interruption
HOUSTON--(Business Wire)--
Stallion Oilfield Services Ltd. ("Stallion" or the "Company"), a leading
oilfield services company that provides comprehensive wellsite support and
production and logistics services to oil and natural gas exploration and
production companies, today announced that it has received the requisite support
of its lenders and equity holders for the balance sheet restructuring agreement
that it announced on October 7, 2009 and that it has filed voluntary petitions
for chapter 11 relief to move forward to implement its prearranged plan and
obtain the necessary court approvals.
On October 7, 2009, Stallion announced that it had reached an agreement in
principle with a working group of secured lenders, a sub-committee of
debtholders, and its key equity holders to implement a restructuring that would
eliminate approximately $515 million of the Company`s unsecured debt as well as
$26 million of accrued interest.
As of October 19, 2009, the Company has more than $80 million of cash on hand to
support both the restructuring and operations. Stallion indicated that it does
not anticipate any changes to the overall business or its ability to meet
customer needs as a result of this action. Mr. Craig M. Johnson, Stallion`s
President and Chief Executive Officer, said, "Stallion is committed to ensuring
a seamless restructuring process for all parties involved, and will emerge as a
leaner, stronger company poised to capitalize on expected recoveries in the oil
and natural gas industry."
The restructuring agreement includes a lock-up agreement with holders of more
than 90% in principal amount of its secured obligations and more than 74%in
principal amount of its unsecured bridge lenders and more than 88% in principal
amount of its unsecured noteholders as well as more than 68% of equity holders
supporting the restructuring. The terms of the restructuring agreement provide
that (a) the Company`s secured lenders would receive approximately $25 million
in principal payments permanently reducing the Company`s obligations outstanding
under the Company`s secured credit agreement, (b) approximately $259 million in
obligations outstanding under the Company`s unsecured bridge loan agreement and
approximately $284 million in obligations outstanding on account of the 9.75%
unsecured notes due February 1, 2015 would be converted on a pro rata basis for
98% of the common equity in the reorganized Stallion, and (c) the Company`s
existing equity holders would receive 2% of the common equity and warrants to
purchase 1% of the common equity in reorganized Stallion.
The full implementation of the agreement is dependent upon a number of factors,
including the filing of a plan of reorganization, the approval of a disclosure
statement and confirmation and consummation of the plan of reorganization in
accordance with the provisions of the Bankruptcy Code.
The Company`s filing includes key initiatives to ensure there is little or no
impact on Stallion`s operations and its employees, customers, vendors and
suppliers. For example, Stallion is seeking court authority to continue payment
of employee wages and benefits and vendors for goods and services delivered both
before and after the filing in the normal course.
Stallion filed its chapter 11 petitions in the United States Bankruptcy Court
for the District of Delaware. Customers, vendors, suppliers and others seeking
more information about Stallion`s restructuring may contact Stallion at
1-888-290-6621. Parties can access court papers from the Court`s electronic
records system at http://ecf.deb.uscourts.gov or
www.chapter11.epiqsystems.com/stallion.
The following affiliates of Stallion were included in the Company`s chapter 11
filings: Stallion Oilfield Services Ltd.; Central Industries, Inc.; Salty`s
Disposal Wells, LP; Salty`s Manufacturing, Ltd.; Stallion Acquisition, LLC;
Stallion Heavy Haulers, LP; Stallion Interests, LLC; Stallion Offshore Quarters,
Inc.; Stallion Oilfield Construction, LLC; Stallion Oilfield Finance Corp.;
Stallion Oilfield Holdings GP, LLC; Stallion Oilfield Holdings, Ltd.; Stallion
Oilfield Services, Inc.; Stallion Production Services, LP; Stallion Production,
LLC; Stallion Rockies Ltd.; Stallion Solids Control, Inc.; and Stallion Stables,
LLC.
Kirkland & Ellis LLP is serving as Stallion`s chapter 11 counsel and Miller
Buckfire & Co., LLC, and AP Services, LLC are serving as its financial advisors.
About Stallion
Stallion Oilfield Services Ltd. provides wellsite support services and
production & logistics services to the oil and natural gas industry with 1,700
employees in 65 locations. Stallion`s range of critical wellsite services
include onshore and offshore workforce accommodations and remote camp complexes,
surface rental equipment, solids control, communication services, wellsite
construction, rig relocation, heavy equipment hauling, fluids handling and
logistics. Stallion`s Everything but the Rig SMproduct offerings are designed to
improve living and working conditions, safety and our customers` productivity at
the wellsite. Stallion is headquartered in Houston, Texas and delivers products
and services in South Texas, Gulf Coast, Ark-La-Tex, Ft. Worth Basin, Permian
Basin, Mid Continent, Alaska`s Prudhoe Bay, the Marcellus Shale and Rocky
Mountain regions as well as to the global offshore industry. Additional
information may be found at www.stallionoilfield.com.
Forward-Looking Statement
This press release includes "forward looking statements" as defined by the
Securities and Exchange Commission (the "SEC"). Forward-looking statements
include all statements that do not relate solely to historical or current facts.
These forward-looking statements are based on the current plans and expectations
of our management and are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical results or those
anticipated. These factors include, but are not limited to: economic conditions
affecting our industry; the adverse effect of legislation and other matters
affecting our industry; increased competition in the industry; our dependence on
certain customers; the risk that we may not be able to retain and attract
customers; the risk that we may not be able to retain critical vendors; the
availability of and costs associated with potential sources of financing,
including interim financing and bankruptcy court approval thereof; the loss of
key personnel; the risk that we may not be able to attract and retain new
qualified personnel; difficulties associated with integrating acquired
businesses and customers into our operations; material deviations from expected
future workers' compensation claims experience; ability to collect on accounts
receivable; the carrying values of deferred income tax assets and goodwill,
which may be affected by future operating results; the availability of capital
or letters of credit necessary to meet state-mandated surety deposit
requirements; and government regulation.
AP Services, LLC
Michelle Campbell, 972-764-2101
Copyright Business Wire 2009
