Court Confirms Davis Petroleum's Plan of Reorganization

Davis Petroleum says that the US Bankruptcy Court has confirmed its plan of reorganization. The court's confirmation of Davis's plan clears the way for the company's emergence from its Chapter 11 proceeding by the end of this month.

"We are extremely pleased the court was able to confirm our plan of reorganization only three days after we filed our pre-packaged Chapter 11 case," said Gregg Davis, president of Davis. "Today really is an important milestone for Davis Petroleum. In the next two weeks we expect to complete our recapitalization and emerge from Chapter 11 with a strong balance sheet, all creditors paid in full, and ample liquidity to fund new growth initiatives."

On March 8, the company announced that it had reached an agreement with a private equity group led by Evercore Capital Partners to recapitalize the company. The Group includes Red Mountain Capital Partners and Sankaty Advisors, an affiliate of Bain Capital.

Under the terms of the agreement, the private equity group and management of the company will purchase all of the equity of Davis Petroleum for approximately $150 million. In addition, the group expects to commit significant additional capital into Davis.

In order to implement its recapitalization, Davis Petroleum filed a petition under Chapter 11 of the Bankruptcy Code together with a plan of reorganization supported by a majority of its shareholders. In accordance with the plan of reorganization, holders of allowed general unsecured claims--primarily pre-petition vendor claims and similar unsecured claims--will be paid in full in cash on March 31, 2006.

"Davis Petroleum has a successful track record in the exploration, discovery, and development of onshore properties as well as more recent finds in the Gulf of Mexico. We look forward to a close partnership with The Evercore Group, which has provided Davis Petroleum with the financial flexibility to build on our track record and continue to grow," Davis concluded.


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