We advised an ad hoc group of secured noteholders in connection with Sable’s chapter 11 restructuring

Davis Polk advised an ad hoc group of prepetition secured noteholders in connection with the chapter 11 cases of Sable Permian Resources, LLC and certain of its affiliates. Sable filed for bankruptcy in the Southern District of Texas on June 25, 2020 and emerged on February 1, 2021.

Under Sable’s chapter 11 plan, the secured noteholders – as a junior creditor class, received warrants for up to 10% of the equity in the reorganized company and rights to cash that had been collateral for the secured notes, among other consideration. Sable’s senior secured lenders received substantially all of Sable’s remaining equity interests under the plan (some of which was sold by individual lenders through a pre-emergence cash-out process) as well as loans under a $315 million exit facility. The plan, which was confirmed on an overwhelmingly consensual basis, was the culmination of a sale process in which a credit bid from the senior secured lenders topped all third-party proposals, as well as settlements among the ad hoc group, the lenders and various other stakeholders.

Sable, which is expected to do business under a different name following its emergence from bankruptcy, is an oil and natural gas exploration and production company. Its operations are concentrated on the development of its oil and natural gas assets, and the acquisition, development and optimization of other oil and natural gas properties in the Permian Basin, specifically the Wolfcamp Shale Play in the core of the Southern Midland Basin.

The Davis Polk restructuring team included partner Damian S. Schaible and associates David Schiff, Gene Goldmintz and Jinhe Hu. The derivatives team included partner John M. Brandow and associate Stockton Bullitt. The corporate team included partner Stephen Salmon. The tax team included partner Patrick E. Sigmon. The litigation team included partner Elliot Moskowitz and associate Melissa Danzo. Members of the Davis Polk team are based in the New York and Northern California offices.