DBJ – Extraction Oil & Gas named a new CEO and revealed a new board of directors as it emerged from Chapter 11 bankruptcy Wednesday, completing six months of restructuring.
Industry veteran Tom Tyree, who had been executive chairman of Denver-based Extraction (Nasdaq: XOG) since early 2020, became CEO of the business.
Tyree replaces co-founder Matt Owens in the role. Owens remains president and COO, the company announced Wednesday afternoon.
Tyree is a board member of Denver-based natural gas company Antero Resources (NYSE: AR) and chairman of the board for Denver-based Northwoods Energy, an exploration and production company focused on Wyoming’s Powder River Basin. He previously served on the board of Denver-based Bonanza Creek Energy Inc. (NYSE: BCEI) and earlier held CFO positions at local production companies Vantage Energy and Bill Barret Corp.
Extraction’s seven-member board of directors is led by Benjamin Dell, named chairman of the board. Dell is co-founder and a managing partner of New York City-based Kimmeridge Energy, an private equity fund focused on the oil industry.
“The Extraction team has worked hard over the last six months to right-size the business, lower its cost structure and optimize its midstream agreements,” Dell said in a press release. “The company is now well positioned to embrace a new [exploration and production] business model focused on generating returns above the cost of capital, delivering free cash flow and, most critically, returning that free cash flow to investors.”
The company will also strive to be an environmental leader in the industry through low-impact operations, emissions reduction and reporting, he said.
Extraction Oil & Gas is focused on crude oil and natural gas production at wells it drills mostly in the western and southern edges of Colorado’s Denver-Julesburg Basin oilfield. It is the fourth-largest crude oil producer in the state by volume, and wells it has drilled in close proximity to northern Colorado suburbs raised the company’s profile.
Extraction filed for Chapter 11 bankruptcy protection on June 14 to free itself from $1.7 billion in debt it couldn’t pay, either by negotiating a debt-for-equity swap with lenders, or by merging or being acquired by another oil and gas company.
The company had, in the depths of the oil market collapse triggered by the Covid-19 pandemic and a Russian and Saudi Arabian price war, been unable to raise new financing.
It did not reach a merger deal and last month received a Delaware bankruptcy court judge’s approval for its restructuring plan.
It was able to reach new pipeline agreements with midstream companies as part of its restructuring.
Extraction’s reorganization includes a raising $200 million from an equity rights offering allowing major debt holders and lenders to convert what they’re owed into new shares in the company. Another $50 million in equity rights will be offered to some creditors holding unsecured general claims against Extraction.
Extraction exits bankruptcy with a $1 billion lending facility in place, which has an initial $500 million borrowing base that matures in July, 2024. The company drew $264 million from that borrowing capacity upon emerging from Chapter 11 protection, adding to the company’s $11 million cash balance.
About 99% of the new shares the company issued went to unsecured claimants and debt notes holders owed when Extraction entered bankruptcy protection last spring.
