As one of the most indebted operators in the Gulf, Energy XXI (EXXI) poses a major risk to taxpayers given its potential USD 1.2bn decommissioning liabilities, according to government data as of 30 August. [...]It looks like the Arch Coal case could get confirmed tomorrow, but the EXXI case has been dragging.
Unable to come up with the necessary cash, the now bankrupt Energy XXI is privately negotiating a tailored plan with BOEM. That plan however, threatens to significantly influence the level of payouts for investors who thought they were first in line for repayment of their bankruptcy claims, said three sources familiar with the case. These so-called senior secured creditors may now have to play second fiddle to the government, who is demanding that P&A costs are covered first. Negotiations over the plan also threaten to derail the company’s exit from bankruptcy as EXXI will be forced to prove that it can meet its P&A obligations to the government before being permitted to operate, the sources noted.