Waldorf Production loses court case for restructuring

 

Waldorf Production UK Plc, Re - Find Case Law - The National Archives

The judgment in Re Waldorf Production UK Plc [2025] EWHC 2181 (Ch) concerns the proposed restructuring plan of Waldorf Production UK Plc (“WPUK”), an oil and gas company operating on the UK Continental Shelf. The plan aimed to enable WPUK to continue trading while pursuing a solvent sale, involving a cross-class cram down of dissenting unsecured creditors—Capricorn Energy and HMRC—who opposed the plan. The restructuring was supported by a steering committee of bondholders holding 84.8% of the bonds. The court examined the statutory preconditions under the Companies Act 2006, including whether dissenting creditors would be worse off under the plan than in the relevant alternative (likely administration or liquidation), and whether the plan was fair.

Justice Hildyard concluded that although the statutory conditions for sanctioning the plan were met, the plan was ultimately unfair. He found that WPUK and its bondholders failed to engage meaningfully with the dissenting creditors during the formulation of the plan, offering only a 5% recovery without negotiation or justification. The court emphasized that the benefits of the restructuring—particularly the potential for a solvent sale—depended on the compromise of the unsecured creditors’ claims. Drawing on recent Court of Appeal decisions, including Re Petrofac, the judge stressed that fairness requires a genuine attempt to negotiate a reasonable compromise with all stakeholders, especially when the restructuring benefits are derived from their concessions.

The judgment also highlighted troubling conduct by WPUK’s former management, including the payment of a US$76 million dividend based on flawed accounts and the failure to engage with HMRC regarding significant tax liabilities. These actions contributed to WPUK’s financial distress and undermined the credibility of the restructuring plan. Ultimately, the court refused to sanction the plan, inviting the parties to pursue further negotiations and potentially return with a revised proposal that fairly allocates the benefits of the restructuring among all creditor classes.

See also: https://oginsights.blogspot.com/2025/07/waldorf-production-north-sea-operator.html

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Permian Part II

The Permian continues to deliver record gas volumes. At the same time, gas demand at the US Gulf Coast continues to grow as more LNG facilities come online.

Yet gas pricing at the Permian remains in negative territory with a $5-7/mcf discount to pricing at Gulf Coast hubs. Egress remains constrained but should ease with pipeline expansions and Matterhorn coming online.

 

Looking forward and further downstream, record LNG exports could see a softer LNG flush market – expect merchant revenues (i.e. excess volumes above contracted SPAs) at Gulf Coast LNG facilities to decline in the coming years.

 

In contrast, pipeline revenues will see growth with pipelines being booked to capacity. Further optionality for pipelines in the case of lower LNG excess volumes trading by supplying existing and new gas power plants in the Gulf Coast region – Texas will be an attractive region for power intensive datacenter development.

 

More generally, the US should see c.2.5% load growth per year over the next 10 years – with 60% driven by datacenters, 40% from reshoring/reindustrialisation and  electrification (20% each). This will need to be met by building new gas generation, renewables (onshore solar), and grid stabilisation with BESS. Coal retirement delays (which kicked off during the Biden administration) will also be needed in a truly “all of the above” solution.

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