Legacy Reserves Inc. Reaches Forbearance Agreement With RBL And Second Lien Lenders

MIDLAND, Texas, June 1, 2019 /PRNewswire/ -- Legacy Reserves Inc. (NASDAQ: LGCY) ("Legacy", and collectively with its subsidiaries, the "Company") announced today that the Company has entered into forbearance agreements (the "Forbearance Agreements") with its lenders under its reserve based revolving credit facility ("RBL Lenders") and its lenders under its second lien term loan ("Second Lien Lenders").  The loans provided under the revolving credit facility matured on May 31, 2019.  Legacy also announced that it has elected not to make its interest payments on June 3, 2019 (the "June Interest Payments") with respect to its outstanding (i) 8% senior notes due 2020, (ii) 6.625% senior notes due 2021, and (iii) 8% convertible senior notes due 2023 (collectively, the "Unsecured Notes").  Non-payment of this interest is not an event of default under the indentures governing the Unsecured Notes, but would become an event of default if the payments are not made within 30 days.

Under the terms of the Forbearance Agreements, the RBL Lenders and Second Lien Lenders have agreed to forbear from exercising any and all remedies available to them in respect of (i) any event of default arising from the maturity of the revolving credit facility on May 31, 2019 and (ii) any event of default arising from Legacy not making the June Interest Payments.  Additionally, the Second Lien Lenders have agreed to further extend the waiver of the covenant that required Legacy to deliver audited financial statements without a "going concern" or like qualification or exception.  The forbearance period extends through 5:00 p.m. (ET) on June 7, 2019, and will terminate upon the earlier of the end of the forbearance period or the occurrence of a specified forbearance termination event.

As previously announced, the Company retained Perella Weinberg Partners and its affiliate, Tudor Pickering Holt & Co., as financial advisor and Sidley Austin LLP as legal advisor to assist Legacy in evaluating and exploring potential strategic alternatives.

About Legacy Reserves Inc.

Legacy Reserves Inc. is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States.  Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions.  Additional information regarding the Company is available at www.legacyreserves.com.

Forward-Looking Statements

This press release may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, are forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimated," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the control of the Company, which could cause results to differ materially from those expected by management of the Company. Such risks and uncertainties include, but are not limited to, the structure and timing of any financial, transactional, or other strategic alternative and whether any such financial, transactional, or other strategic alternative will be completed; whether the Company will be able to receive any future forbearances; realized oil and natural gas prices; production volumes, lease operating expenses, general and administrative costs and finding and development costs; future operating results; and the factors set forth under the heading "Risk Factors" in Legacy Reserves Inc.'s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE Legacy Reserves Inc.