Bankrupt shale fracker Sable Permian Resources LLC has agreed to sell itself to bank lenders, all but wiping out more than $700 million of debt held by secured bondholders, WSJ Pro Bankruptcy reported. The bid from lenders, led by agent JPMorgan Chase & Co., was the only qualified offer that Sable Permian received for its assets, according to a filing on Thursday in the U.S. Bankruptcy Court in Houston. Under the bank’s offer, the lenders would take 100 percent ownership of the Houston-based company, plus their share of a $315 million exit loan that would help fund Sable Permian’s way out of bankruptcy. The lenders were owed $650 million in bankruptcy loans and reserve-based loans they had extended, court papers said. If approved in bankruptcy court, the proposal would mark the latest instance in which, when the borrower went bankrupt, the oil reserves that banks lent against turned out to be worth less than the loans made. Other examples have included shale driller Alta Mesa Resources Inc. and Gulf of Mexico operator Arena Energy LP. Even before the pandemic, Sable Permian had struggled for years, narrowly avoiding bankruptcy in 2019 through an out-of-court restructuring deal. But JPMorgan reined in the company’s financial lifeline in April as banks reassessed the size of credit lines backed by oil and gas underground.
