Here you can find answers to the most frequently asked questions.
Why did Bruin file for Chapter 11 bankruptcy?
Like many E&P companies, Bruin has been significantly impacted by the rapid downturn in oil and gas prices caused by depressed commodity prices as a result of production disputes between OPEC (primarily Saudi Arabia) and Russia as well as the macroeconomic effects of the COVID-19 pandemic.
A chapter 11 filing was necessary to provide Bruin with the time to work on a plan that will right-size our balance sheet, align our capital structure with the current volatile commodity price environment and generate long-term value for all stakeholders.
Bruin is a strong business with sufficient funds to meet our obligations to employees, owners, and partners, and to continue to operate without interruption throughout this process.
Importantly: (1) we have a high-quality asset base and sufficient liquidity, which we will use to fund the chapter 11 process and operate our business in the ordinary course; (2) we have filed a debtor in possession financing and cash collateral motion that, once approved by the bankruptcy court, will give us access to additional financing provided by our senior lenders; and (3) the bankruptcy filing is supported by certain of Bruin’s senior lenders, who have agreed to a Restructuring Support Agreement that will provide a framework pursuant to which Bruin will reorganize.
In addition, Bruin filed a proposed Plan of Reorganization and Disclosure Statement that, together with the Restructuring Support Agreement, set forth a path for the Company to emerge from this process as a stronger business enterprise going forward. Bruin plans to move swiftly toward Court approval of the Plan, with confirmation expected within approximately 45 days from filing.
Bruin does not anticipate making changes to our operations, management team, or board during these cases.
Ultimately, Bruin believes that commencing these chapter 11 cases is the best course of action to preserve and maximize value for all stakeholders.
What does it mean to file for Chapter 11 protection?
Chapter 11 is a legal process designed to help companies continue to operate while they implement plans to restructure their finances. Chapter 11 permits, and even encourages, daily business operations to continue as usual.
Importantly, filing for Chapter 11 does not mean that Bruin is going out of business or liquidating.
Where did Bruin file?
The voluntary petitions were filed in the U.S. Bankruptcy Court for the Southern District of Texas in Houston, TX.
How will the bankruptcy affect day-to-day operations?
Bruin will continue to operate throughout the chapter 11 process in a manner consistent with our prepetition operations, and we do not expect any significant interruptions to our day-to-day operations.
For Bruin, we believe this process will provide us with the financial flexibility to not only successfully navigate the current commodity price environment but to continue building our platform for future operational and strategic growth.
Will suppliers be impacted by the bankruptcy?
Bruin intends to pay suppliers for all goods and services received on or after the filing date according to our current terms and existing practices in the ordinary course of business.
Bruin will continue to comply with all applicable laws, rules and regulations, including the requirements of the Mindan, Hidatsa and Arikara Nation Tribal Employment Rights Office.
Invoices for goods and services provided after the filing date should be submitted through the typical accounts payable channels. Your contacts at Bruin will remain the same.
Unfortunately, U.S. Bankruptcy law mandates that Bruin is not allowed to pay unpaid debts for goods and services provided before the filing date (known as “prepetition claims”) without Bankruptcy Court approval. Bruin’s proposed Plan, if approved by the Bankruptcy Court, will provide for payment in full to the vast majority of general unsecured claim holders.
We value the partnership we have developed with your company and plan to work closely with you throughout this process. We appreciate your support.
Can I renegotiate the terms of my contract or discontinue my contract with Bruin?
Bruin will maintain existing payment terms and expects our vendors to continue to honor existing agreements.
If you have an executory contract with Bruin, bankruptcy law requires that you continue to perform services or provide goods under that contract unless the bankruptcy court orders otherwise.
Why should I continue to do business with Bruin?
As you can appreciate, the ongoing support of our vendors is essential to the success of these cases, and your cooperation will ensure that our business continues to operate normally.
Importantly, we have sufficient liquidity to operate in the ordinary course and maintain productive commercial relationships with our vendors, owners, partners and counterparties.
We believe that we will emerge from this process as a stronger partner to our vendors.
We value the long-term relationship we have developed with your company, and we look forward to continuing to work together for years to come.
Will there be any changes in the management of the company?
No. There are no management changes anticipated at this time. Bruin’s management team will continue to run our day-to-day operations during and after these chapter 11 cases.
How long will this process take?
It is Bruin’s intent to move through the chapter 11 process as quickly and efficiently as possible, although the exact timeline depends on a number of factors, many of which are not in Bruin’s control.
We will keep you properly informed as the process moves forward by providing updates on key events on Bruin’s restructuring website (see below).
Will my Bruin contact remain the same?
Yes. You can continue to reach out to your normal contacts.