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Bankruptcy Watch: 3/17/16

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As we near the spring re-determination date of March 31, 2016, the squeeze is being felt as a growing number of producers have delayed their 10k reporting due to pending credit agreement defaults which need to be resolved in order to continue as a going concern.  This week the following companies have announced they are pursuing some form of restructuring:


New Source Energy LP Ticker: NSLP filed for Chapter 7 Liquidation on Tuesday.  This is the first MLP in recent times which failed and resulted in a liquidation


Midstream Providers: Blackstone Minerals (BSM), DCP Midstream (DPM) are on the creditor list, but without any further details



Linn Energy Ticker: LINE exercised their grace period in regards to their $60MM interest payment due 3/15/16, and is working towards a restructuring.  In their 2016 Annual Report, they disclosed the following midstream agreements, three of which are generating deficiency payments due to volumes lower than their MVC commitments.  Linn owns the gathering systems for all of their operating acreage.


Midstream Providers:  Kinder Morgan, Tallgrass Development (Sponsor of Tallgrass Energy Partners)




Energy XXI Ticker: EXXI, an oil focused production company with assets focused in South Louisiana and the Gulf of Mexico shelf, announced its intent to exercise its grace period on their interest payment and Notes due on March 15, 2016.  On June 30th, 2015, the company sold the Grand Isle Gathering System (GIGS) for $245MM to CorEnergy where EXXI would continue to operate their main gathering system, in return for an 11 year triple net lease agreement with CorEnergy, with annual minimum rents averaging $40.5MM for the term.   


Midstream Providers:  CorEnergy 


Venoco, an E&P company with Southern California onshore and offshore assets, announced their Ch 11 filing on Friday after their Holly platform suspended operations due to the Plains All American pipeline spill in May 2015.   


Midstream Provider: Plains All American






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