Extraction Oil & Gas has voluntarily filed for petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

The company has obtained a committed $125 million debtor-in-possession financing facility, which contemplates $50 million in new money, up to $15 million of which will become immediately available upon Bankruptcy Court’s order, and a “roll up” of $75 million of revolving loans under the company’s existing revolving credit agreement.

The DIP facility is underwritten by Wells Fargo and the $50 million in new money is financed by certain lenders under the company’s existing revolving credit agreement. Subject to Court approval, this DIP financing, combined with the company’s cash from operations, is expected to provide sufficient liquidity during the Chapter 11 cases to support its continuing business operations and minimize disruption.

“After months of liability management and careful analysis of our strategic options, we determined that a voluntary Chapter 11 filing with key creditor support provides the best possible outcome for Extraction,” said Extraction CEO Matt Owens. “The restructuring steps we have announced today are necessary to strengthen our balance sheet, improve our overall cost structure, and position Extraction for future success.”

“I would like to thank our customers, employees, suppliers and partners for their support through the COVID-19 pandemic,” Owens said. “We are working tirelessly on expediting an efficient in-court restructuring that will allow us to maintain our operational momentum and uphold the obligations we have to our employees, customer, vendors and stakeholders.”

Kirkland & Ellis LLP is serving as legal counsel to Extraction. Moelis & Company LLC and Petrie Partners, LLC are acting as financial advisors to the company. Alvarez & Marsal is acting as restructuring advisor to the company.