in the united states bankruptcy court for the … · in re: ) chapter 11 ) echo energy partners i,...

IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS,

HOUSTON DIVISION

In re: ) Chapter 11 ) ECHO ENERGY PARTNERS I, LLC ) Case No. 20-31920 ) Debtor. )

DISCLOSURE STATEMENT FOR THE DEBTOR’S PROPOSED CHAPTER 11 PLAN OF LIQUIDATION

IMPORTANT DATES

• Date by which Ballots must be received: September 25, 2020

• Deadline by which objections to Confirmation of the Plan must be Filed and served: September 25, 2020

• Hearing on Confirmation of the Plan: September 29, 2020 at 2:00 P.M.

BRACEWELL LLP William A. (Trey) Wood III Texas Bar No. 21916050 [email protected] Jason G. Cohen Texas Bar No. 24050435 [email protected] 711 Louisiana, Suite 2300 Houston, Texas 77002 Telephone: (713) 223-2300 Facsimile: (713) 221-1212 COUNSEL FOR THE DEBTOR AND DEBTOR IN POSSESSION

THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BY THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT. ACCORDINGLY, THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN. ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT

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Case 20-31920 Document 301 Filed in TXSB on 08/14/20 of 51

THE DISCLOSURE STATEMENT CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF THE PLAN AND CERTAIN OTHER DOCUMENTS AND FINANCIAL INFORMATION. THE INFORMATION INCLUDED IN THE DISCLOSURE STATEMENT IS PROVIDED FOR THE PURPOSE OF SOLICITING ACCEPTANCES OF THE PLAN AND SHOULD NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE WHETHER AND HOW TO VOTE ON THE PLAN. THE SUMMARIES OF THE FINANCIAL INFORMATION AND THE DOCUMENTS WHICH ARE ATTACHED TO, OR INCORPORATED BY REFERENCE IN, THE DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO SUCH INFORMATION AND DOCUMENTS AND THE STATEMENTS REFLECTED HEREIN OR THEREIN, RESPECTIVELY. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THE DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN, OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION INCORPORATED IN THE DISCLOSURE STATEMENT BY REFERENCE, THE PLAN OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION, AS THE CASE MAY BE, SHALL GOVERN FOR ALL PURPOSES.

THE STATEMENTS AND FINANCIAL INFORMATION CONTAINED IN THE DISCLOSURE STATEMENT HAVE BEEN MADE AS OF THE DATE OF THE DISCLOSURE STATEMENT UNLESS OTHERWISE SPECIFIED. HOLDERS OF CLAIMS AND INTERESTS REVIEWING THE DISCLOSURE STATEMENT SHOULD NOT INFER AT THE TIME OF SUCH REVIEW THAT THERE HAVE BEEN NO CHANGES IN THE FACTS SET FORTH IN THE DISCLOSURE STATEMENT SINCE THE DATE OF THE DISCLOSURE STATEMENT OR THE DATES OTHERWISE NOTED. EACH HOLDER OF A CLAIM OR INTEREST ENTITLED TO VOTE ON THE PLAN SHOULD CAREFULLY REVIEW THE PLAN, THE DISCLOSURE STATEMENT, AND THE PLAN SUPPLEMENT IN THEIR ENTIRETY BEFORE CASTING A BALLOT. THE DISCLOSURE STATEMENT DOES NOT CONSTITUTE LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE. ENTITIES DESIRING SUCH ADVICE OR ANY OTHER ADVICE SHOULD CONSULT WITH THEIR OWN ADVISORS.

NO ONE IS AUTHORIZED TO GIVE ANY INFORMATION WITH RESPECT TO THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THE DISCLOSURE STATEMENT. NO REPRESENTATIONS CONCERNING THE DEBTOR OR THE VALUE OF ITS PROPERTY HAVE BEEN AUTHORIZED BY THE DEBTOR OTHER THAN AS SET FORTH IN THE DISCLOSURE STATEMENT AND THE DOCUMENTS ATTACHED TO THE DISCLOSURE STATEMENT. ANY INFORMATION, REPRESENTATIONS, OR INDUCEMENTS MADE TO OBTAIN AN ACCEPTANCE OF THE PLAN THAT ARE OTHER THAN AS SET FORTH, OR INCONSISTENT WITH THE INFORMATION CONTAINED IN THE DISCLOSURE STATEMENT OR THE DOCUMENTS ATTACHED TO THE DISCLOSURE STATEMENT AND THE PLAN, SHOULD NOT BE RELIED UPON BY ANY HOLDER OF A CLAIM OR INTEREST.

WITH RESPECT TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS, AND OTHER PENDING, THREATENED, OR POTENTIAL LITIGATION OR OTHER ACTIONS, THE DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE


CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION, OR WAIVER, BUT RATHER AS A STATEMENT MADE IN THE CONTEXT OF SETTLEMENT NEGOTIATIONS PURSUANT TO RULE 408 OF THE FEDERAL RULES OF EVIDENCE. THE DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED IN THE DISCLOSURE STATEMENT.

THE FINANCIAL INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE INTO THE DISCLOSURE STATEMENT HAS NOT BEEN AUDITED, EXCEPT AS SPECIFICALLY INDICATED OTHERWISE.

THE PROJECTIONS PROVIDED IN THE DISCLOSURE STATEMENT, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS THAT, THOUGH CONSIDERED REASONABLE BY THE DEBTOR AND ITS PROFESSIONALS, MAY NOT BE REALIZED, AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE, INDUSTRY, REGULATORY, MARKET, AND FINANCIAL UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE DEBTOR’S CONTROL. THE DEBTOR CAUTIONS THAT NO REPRESENTATIONS CAN BE MADE AS TO THE ACCURACY OF THESE PROJECTIONS OR TO THE ABILITY TO ACHIEVE THE PROJECTED RESULTS.

THE BANKRUPTCY COURT HAS SCHEDULED THE CONFIRMATION HEARING TO COMMENCE ON SEPTEMBER 29, 2020 AT 2:00 P.M. PREVAILING CENTRAL TIME BEFORE THE HONORABLE BILL PARKER UNITED STATES CHIEF BANKRUPTCY JUDGE, IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, 515 RUSK STREET, COURTROOM 400, HOUSTON, TEXAS 77002. THE CONFIRMATION HEARING MAY BE ADJOURNED FROM TIME TO TIME BY THE BANKRUPTCY COURT WITHOUT FURTHER NOTICE EXCEPT FOR AN ANNOUNCEMENT OF THE ADJOURNED DATE MADE AT THE CONFIRMATION HEARING OR ANY ADJOURNMENT OF THE CONFIRMATION HEARING.

TO BE COUNTED, THE BALLOT INDICATING ACCEPTANCE OR REJECTION OF THE PLAN MUST BE RECEIVED BY THE VOTING AGENT FOR THE DEBTOR IN THIS CHAPTER 11 CASE, NO LATER THAN SEPTEMBER 25, 2020.

OBJECTIONS TO CONFIRMATION OF THE PLAN MUST BE FILED AND SERVED ON OR BEFORE SEPTEMBER 25, 2020. UNLESS OBJECTIONS TO CONFIRMATION ARE TIMELY SERVED AND FILED IN COMPLIANCE WITH THE ORDER APPROVING THE DISCLOSURE STATEMENT, THEY MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT.


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TABLE OF CONTENTS SUMMARY OF PLAN ....................................................................................................................1

ARTICLE I BACKGROUND .........................................................................................................1 1.1 Introduction ........................................................................................................1 1.2 Sources of Information ......................................................................................2 1.3 Description of Debtor’s Business and Assets ....................................................2 1.4 Debtor’s Corporate Structure .............................................................................3 1.5 Debtor’s Capital Structure .................................................................................3 1.6 Events Precipitating the Bankruptcy Case .........................................................3

THE CHAPTER 11 CASE ..............................................................................................................5 1.7 Overview of Chapter 11 .....................................................................................5 1.8 Administration of the Chapter 11 Case ..............................................................5

ARTICLE II CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS ............8 2.1 Introduction ........................................................................................................8 2.2 Voting; Acceptance by Impaired Classes ...........................................................8 2.3 Cramdown ..........................................................................................................8 2.4 U.S. Trustee Fees ...............................................................................................8 2.5 Administrative Claims .......................................................................................9 2.6 Priority Tax Claims ............................................................................................9 2.7 Class 1 – Priority Claims ...................................................................................9 2.8 Class 2 – Other Secured Claims .........................................................................9 2.9 Class 3 – Prepetition Lenders’ Secured Claim .................................................10 2.10 Class 4 – General Unsecured Claims ...............................................................10 2.11 Class 5 – Subordinated Claims ........................................................................10 2.12 Class 6 – Interests ............................................................................................10 2.13 Summary of Proposed Distributions under the Plan ........................................ 11

ARTICLE III MEANS FOR IMPLEMENTATION OF THE PLAN ............................................ 11 3.1 Sale of the Acquired Assets .............................................................................. 11 3.2 Continued Existence; Vesting of Assets ........................................................... 11 3.3 The Reorganized Debtor ..................................................................................12 3.4 Plan Administrator ...........................................................................................12 3.5 Compensation of the Plan Administrator .........................................................12 3.6 Funding of the Wind Down Budget .................................................................12 3.7 Dissolution of the Reorganized Debtor ............................................................12 3.8 Powers and Duties of the Plan Administrator ..................................................13 3.9 Cancellation of Interests ..................................................................................13 3.10 Termination of Status; Managers, Directors and Officers ...............................14 3.11 Resignation/Removal of Plan Administrator ...................................................14 3.12 Distribution Procedures ...................................................................................14 3.13 Accounting and Reporting ...............................................................................15 3.14 Books and Records ..........................................................................................15 3.15 Preservation of Rights of Action ......................................................................15 3.16 Effectuating Documents; Further Reorganization Transactions ......................16


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3.17 Exemption from Certain Transfer Taxes ..........................................................16 3.18 Closing of the Chapter 11 Case ........................................................................17

ARTICLE IV THE SOLICITATION; VOTING PROCEDURES .................................................17 4.1 Solicitation Package .........................................................................................17 4.2 Voting Instructions ...........................................................................................17 4.3 Voting Tabulation .............................................................................................18 4.4 Agreements upon Furnishing Ballots ...............................................................19

ARTICLE V FEASIBILITY, BEST INTEREST OF THE CREDITORS AND LIQUIDATION ................................................................................................19

5.1 Feasibility of the Plan ......................................................................................19 5.2 Best Interest of Creditors Test ..........................................................................19

ARTICLE VI CONFIRMATION PROCEDURES .......................................................................20 6.1 The Confirmation Hearing ...............................................................................20 6.2 Statutory Requirements for Confirmation of the Plan .....................................21 6.3 Identity of Persons to Contact for More Information ......................................24

ARTICLE VII CERTAIN RISK FACTORS AFFECTING THE DEBTOR .................................24 7.1 Certain Bankruptcy Law Considerations .........................................................24

ARTICLE VIII ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN ......................................................................................................24

8.1 Liquidation under Chapter 7 ............................................................................24 8.2 Alternative Plan ...............................................................................................25 8.3 Dismissal of Case .............................................................................................26

ARTICLE IX EXECUTORY CONTRACTS, UNEXPIRED LEASES, AND OTHER AGREEMENTS ...............................................................................................26

9.1 Assumption/Rejection ......................................................................................26 9.2 Claims Based on Rejection of Executory Contracts and Unexpired

Leases 26 9.3 Insurance Policies ............................................................................................26 9.4 Reservation of Rights .......................................................................................26 9.5 Nonoccurrence of Effective Date .....................................................................27

ARTICLE X PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND UNLIQUIDATED CLAIMS ............................................................................27

10.1 Objections to Claims ........................................................................................27 10.2 Objection Deadline ..........................................................................................27 10.3 Estimation of Claims........................................................................................27 10.4 No Distributions Pending Allowance...............................................................28 10.5 Distributions after Allowance ..........................................................................28 10.6 Reduction of Claims ........................................................................................28 10.7 Compliance with Tax Requirements/Allocations ............................................28

ARTICLE XI CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN ...............................................................29

11.1 Conditions Precedent to Confirmation.............................................................29


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11.2 Conditions Precedent to Effective Date ...........................................................30 11.3 Substantial Consummation ..............................................................................30 11.4 Waiver of Conditions .......................................................................................30 11.5 Revocation, Withdrawal, or Non-consummation .............................................30

ARTICLE XII AMENDMENTS AND MODIFICATIONS ..........................................................31

ARTICLE XIII RETENTION OF JURISDICTION .....................................................................31

ARTICLE XIV COMPROMISES AND SETTLEMENTS ...........................................................32

ARTICLE XV MISCELLANEOUS PROVISIONS .....................................................................33 15.1 Bar Dates for Certain Actions ..........................................................................33 15.2 Severability of Plan Provisions ........................................................................34 15.3 Successors and Assigns ....................................................................................34 15.4 Releases by the Debtor.....................................................................................34 15.5 Exculpation ......................................................................................................35 15.6 Indemnification ................................................................................................35 15.7 Permanent Injunction .......................................................................................36 15.8 Bankruptcy Rule 3016 Compliance .................................................................36 15.9 Term of Injunctions or Stay .............................................................................36 15.10 Integral to Plan .................................................................................................36 15.11 Preservation of Rights of Action; Settlement...................................................37 15.12 Binding Effect ..................................................................................................37 15.13 Notices .............................................................................................................37 15.14 Setoffs/Counterclaims ......................................................................................38 15.15 Recoupment .....................................................................................................38 15.16 Release of Liens ...............................................................................................38 15.17 Request for Expedited Tax Review ..................................................................39 15.18 Dissolution of the Creditors Committee .......... Error! Bookmark not defined. 15.19 No Admissions .................................................................................................39 15.20 Governing Law ................................................................................................39

ARTICLE XVI 39

CERTAIN U.S FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ........................39 16.1 Certain Material U.S. Federal Income Tax Consequences of the Plan ............39 16.2 Consequences to U.S. Holders of Certain Claims ...........................................41 16.3 Information Reporting and Withholding ..........................................................42 16.4 Importance of Obtaining Professional Tax Assistance ....................................43

ARTICLE XVII CONCLUSION AND RECOMMENDATION ..................................................43


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TABLE OF EXHIBITS

Exhibit Name

A Plan of Liquidation B Liquidation Analysis C Payments/Transfers to Creditors within 90 Days (or One Year for Insiders)


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SUMMARY OF PLAN

On August 14, 2020, the Debtor filed its Chapter 11 Plan of Liquidation for Echo Energy Partners I, LLC,1 which proposes to distribute the Debtor’s assets, including proceeds from the sale of substantially all of its oil and gas assets, to its creditors and for the Reorganized Debtor to liquidate the Debtor’s remaining assets, and wind-down its affairs. Pursuant to the terms of the Plan and the Plan Administration Agreement, a Plan Administrator will distribute the net proceeds of the sale of substantially all oil and gas assets, as well the proceeds from any other Assets to Creditors in order of the priority of their Claims.

Under the Plan, all Allowed Administrative Claims, all Allowed Priority Tax Claims, and all Priority Claims shall be paid in full on or promptly after the Effective Date. Holders of Other Secured Claims will either, in accordance with the priority of such Other Secured Claim with respect to the collateral securing such claim: (i) be paid up to the extent of such Other Secured Claim; or (ii) receive their collateral, without representation of warranty. The Allowed Prepetition Lenders’ Secured Claims will be paid the Cash proceeds of the collateral securing the Prepetition Secured Lenders’ Claim. General Unsecured Claims will receive their pro rata share of the Available Assets after payment of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Claims, Allowed Other Secured Claims, Allowed Prepetition Lenders’ Secured Claims, and the payment of, or provision for, all other amounts payable under the Wind Down Budget. Holders of Allowed Interests against the Debtor shall be cancelled and extinguished, and the holders of Interests shall not receive or retain any property or assets on account of their Interests.

ARTICLE I BACKGROUND

1.1 Introduction

Echo Energy Partners I, LLC, a Delaware limited liability company, and the debtor in the above-captioned Chapter 11 Case (the “Debtor”) submits the following Disclosure Statement pursuant to Bankruptcy Code section 1125 for the purpose of soliciting votes to accept or reject the Debtor’s Plan. A copy of the Plan is attached hereto as Exhibit A. The Disclosure Statement describes certain aspects of the Plan, including the treatment of holders of Claims and Interests, and also describes certain aspects of the Debtor’s operations, financial projections, and other related matters.

On March 24, 2020 (the “Petition Date”), the Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. Pursuant to Bankruptcy Code sections 1107 and 1108, the Debtor is continuing to operate its business and manage its properties as debtor in possession in this Chapter 11 Case.

1 Capitalized terms used in this Disclosure Statement and not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.


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1.2 Sources of Information

THE INFORMATION CONTAINED HEREIN HAS NOT BEEN SUBJECTED TO A CERTIFIED AUDIT AND IS BASED, IN PART, UPON INFORMATION PREPARED BY PARTIES OTHER THAN THE DEBTOR. THEREFORE, ALTHOUGH THE DEBTOR HAS MADE EVERY REASONABLE EFFORT TO BE ACCURATE IN ALL MATERIAL MATTERS, THE DEBTOR IS UNABLE TO WARRANT OR REPRESENT THAT ALL THE INFORMATION CONTAINED HEREIN IS COMPLETELY ACCURATE.

Except as otherwise expressly indicated, the portions of this Disclosure Statement describing the Debtor, its business, properties and management, and the Plan, have been prepared from information furnished by the Debtor.

Certain of the materials contained in this Disclosure Statement are taken directly from other readily accessible documents or are digests of other documents. While the Debtor has made every effort to retain the meaning of such other documents or portions that have been summarized, the Debtor urges that any reliance on the contents of such other documents should depend on a thorough review of the documents themselves. In the event of a discrepancy between this Disclosure Statement and the actual terms of a document, the actual terms of such document shall apply.

The authors of the Disclosure Statement have compiled information from the Debtor without professional comment, opinion or verification and do not suggest comprehensive treatment has been given to matters identified herein. Each holder of a Claim and/or Interest is urged to independently investigate any such matters prior to reliance.

No statements concerning the Debtor, the value of its property, or the value of any benefit offered to the Holder of a Claim or Interest in connection with the Plan should be relied upon other than as set forth in this Disclosure Statement. In arriving at your decision, you should not rely on any representation or inducement made to secure your acceptance or rejection that is contrary to information contained in this Disclosure Statement, and any such additional representations or inducements should be reported to counsel for the Debtor, Bracewell LLP, 711 Louisiana Street, Suite 2300, Houston, Texas 77002, Attention: William A. (Trey) Wood III.

1.3 Description of Debtor’s Business and Assets

The Debtor is a Delaware limited liability company that, on the Petition Date, owned certain non-operated oil and gas interests and related assets. Echo Investment Partners, LLC (“EIP”) is the sole member of the Debtor. The Debtor is managed by a board of managers, which consists of one manager – John T. Young, Jr. On the Petition Date, the Debtor held non-operating oil and gas interests in more than 700 horizontally drilled producing wells in Oklahoma. The majority of those wells are in the natural gas-heavy Anadarko Basin.

As further described herein, the Debtor sold substantially all of its assets to the Purchaser,

pursuant to the Sale Order dated July 2, 2020. The Sale closed on July 31, 2020.


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1.4 Debtor’s Corporate Structure

The Debtor is a Delaware Limited Liability Company. EIP is the sole member of the Debtor. The Debtor is managed by a board of managers, which consists of one manager – John T. Young, Jr.

1.5 Debtor’s Capital Structure

The Debtor is a borrower under that certain Credit Agreement (together with related loan documents and as amended, restated, modified or supplemented, the "Pre-Petition Credit Agreement") with certain lenders party thereto and Texas Capital Bank, National Association, (“TCB”), as Administrative Agent and L/C Issuer (the "Pre-Petition Agent"), and TCB, as Sole Lead Arranger and Sole Book Runner, dated January 19, 2018. There have been two amendments to the Pre-Petition Credit Agreement. The First Amendment to the Pre-Petition Credit Agreement was effective on July 15, 2018. The Second Amendment to the Pre-Petition Credit Agreement was effective on November 2, 2018. In connection with the Pre-Petition Credit Agreement, the Debtor, on January 19, 2018, executed that certain Note in favor of the Pre-Petition Agent. The Pre-Petition Credit Agreement provides for revolving loans of up to a total of $250 million and letters of credit of up to a total of the greater of $5 million and the borrowing base thereunder, which limits availability under the Pre-Petition Credit Agreement. As of the Petition Date, the borrowing base was $80 million, and at least $80 million in loans and advances were outstanding.

Additionally, the Debtor’s sole member, EIP, is a borrower under the certain agreement to purchase notes dated January 19, 2018, (as amended, restated, supplemented or otherwise modified from time to time, the “Prepetition Note Purchase Agreement”), whereby certain financial institutions party thereto are holders, and HPS Investment Partners, LLC (“HPS”) is the administrative agent. The Note Purchase Agreement, as amended, provides for an aggregate amount of $165 million of Notes to be sold and purchased. The Notes are secured by a senior secured first lien on all of EIP’s right, title, and interest in all of the Equity Interests of the Debtor, the certificates representing the Membership interest, all rights to money or property of the Membership Interests which EIP had at the time of or acquired after the date of the Note Purchase Agreement, and all proceeds from the aforementioned collateral. On or about September 30, 2019, HPS exercised its rights pursuant to the pledge agreement associated with the Prepetition Note Purchase Agreement and assumed the right to exercise voting and other consensual rights formerly associated with EIP’s sole equity interest in the Debtor.

1.6 Events Precipitating the Bankruptcy Case

The Debtor faced significant financial challenges brought on by sustained low natural gas prices and tightening liquidity markets. In mid-2018, with the benchmark Henry Hub natural gas price hovering near $3.00 per million Btu, the Debtor realized it would need additional liquidity to fund capital and operations expenditures to its Affiliated and Third-Party Operators through JIBs. The Debtor had some initial success and was able to access capital to maintain operations. However, as natural gas prices fell further in 2019 and production remained flat, the Debtor recognized that additional liquidity would be required to maintain operations in the normal course of business.


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Despite reaching out to more than a dozen banks and other lenders in late 2019 and early 2020, deteriorating market conditions precluded the Debtor from securing either sufficient prepetition debt financing or additional investment from its equity investors. As benchmark natural gas prices plummeted to below $2.50 per million Btu, energy lenders began to tighten credit and the broader market undertook an industry-wide revaluation of energy assets based on assumptions that prices would remain lower for longer. In September of 2019, as a result of Debtor’s deteriorating finances, HPS exercised its right under the Prepetition Note Purchase Agreement to assume the equity voting rights that the Debtor’s parent, EIP, had pledged to HPS as part of the Prepetition Note Purchase Agreement financing.

In early 2020, the Debtor maintained its search for additional liquidity but continued to be stymied by worsening market conditions. Natural gas prices continued to trend lower—by January 2020 prices had fallen below $2.00—and capital markets continued to tighten across the energy industry for all producers. Furthermore, the value of Debtor’s primary assets—working interests in gas-heavy, capital intensive, non-operated wells with longer production curves—have been particularly challenged by the wider energy-market’s revaluation of many distressed assets given lower price assumptions. Ultimately, the Debtor was unable to secure prepetition financing on a junior or unsecured basis despite a tireless process that involved contacting more than a dozen lenders.

As the Debtor scrambled for additional liquidity, outstanding JIB obligations continued to accrue. By late 2019, many Third-Party Operators had begun to exercise their rights under the applicable Pooling Agreements to offset revenues otherwise due to the Debtor against the outstanding balance. The Debtor has been caught in a vicious cycle where its ability to pay present invoices is limited by offsets incurred against past-due balances. Certain Third-Party Operators have intensified this pressure by filing liens against the Debtor’s assets in the various counties in which the wells were located.

In late January 2020, the financial pressure on the Debtor boiled over when the Debtor’s largest Third-Party Operator, Continental Resources Inc., initiated a forced forfeiture of Debtor’s working interests in certain key wells. Others have followed suit. Warwick-Jupiter, LLC and US Drilling Company, LLC (collectively, “Warwick”) has since affected a similar forfeiture.

Furthermore, nearly all of the Debtor’s Third-Party Operators have exercised their right under applicable Pooling Agreements to offset their JIB receivables against revenue otherwise payable to the Debtor. Affiliated Operators are also offsetting the outstanding expenses against revenues otherwise due to the Debtor.

On the Petition Date, the Debtor owed an estimated $8.8 million in outstanding JIB payments to non-affiliated Third-Party Operators. In addition, the Debtor owed approximately $4.5 million in arrears to its Affiliated Operators with respect to its obligations under the MSA. The Debtor faced additional forfeitures and foreclosures due to its inability to pay down its outstanding JIBs.

Given the risk to the Debtor’s business and the lack of available prepetition liquidity, the Debtor retained restructuring advisors Opportune LLP (“Opportune”) and Bracewell LLP in


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February as it began actively pursuing restructuring alternatives including post-petition financing.

The forfeiture of the Debtor’s participatory working interests in the key Continental wells, in addition to the loss of revenue due to offsets from the Third-Party Operators had a debilitating effect on the Debtor’s going concern value and threatened the Debtor’s ability to meet ongoing obligations. The Debtor faced further liens and forfeitures absent the liquidity required to clear these arrearages and restore its interests and revenue stream. After consultation with its advisors, the Debtor determined that restructuring its business would maximize value for its stakeholders over and above a foreclosure sale. Consequently, the Debtor initiated this chapter 11 proceeding.

THE CHAPTER 11 CASE

1.7 Overview of Chapter 11

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Chapter 11 authorizes a debtor to reorganize its business for the benefit of its creditors, equity interest holders, and other parties in interest. Commencing a chapter 11 case creates an estate that comprises all of the legal and equitable interests of the debtor as of the filing date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.”

The principal objective of a chapter 11 case is to consummate a plan. A plan sets forth the means for satisfying claims against and interests in a debtor. Confirmation of a plan by a bankruptcy court binds a debtor, any issuer of securities thereunder, any person acquiring property under the plan, any creditor or equity interest holder of a debtor, and any other person or entity the bankruptcy court may find to be bound by such plan. Chapter 11 requires that a plan treat similarly situated creditors and similarly situated equity interest holders equally, subject to the priority provisions of the Bankruptcy Code.

Prior to soliciting acceptances of a proposed plan, Bankruptcy Code section 1125 requires a debtor to prepare a disclosure statement containing information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment regarding acceptance of the plan. This Disclosure Statement is submitted in accordance with Bankruptcy Code section 1125.

1.8 Administration of the Chapter 11 Case

1.8.1 First-day Motions

On April 2, 2020, the Debtor filed several first-day motions, the object of which was to streamline the transition to operating under chapter 11, to stabilize operations, and to preserve its relationships with its creditors, its affiliated and non-affiliated operators, and the Prepetition Secured Lenders. These first-day motions requested, among other things, authority to use cash collateral of the Prepetition Secured Lenders, authorization of secured post-petition financing, and authority to pay prepetition joint interest billing obligations.


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1.8.2 Cash Collateral Motion

The Debtor’s motion for authorization of secured post-petition financing and authority to use cash collateral of the Prepetition Secured Lenders included a negotiated 13-week cash collateral financing budget that would allow the Debtor sufficient time to complete the sale process. The Court authorized the Debtor’s secured post-petition financing and granted the Debtor the authority to use cash collateral pursuant to the negotiated budget in the Final Order (I) Authorizing Secured Post-Petition Financing; (II) Authorizing the Use of Cash Collateral; (III) Granting Security Interests, Superpriority Claims, and other Adequate Protections; and (IV) Modifying the Automatic Stay, dated April 30, 2020 (Dkt. No. 129).

1.8.3 Retention of Professionals

Pursuant to Court order, the Debtor retained Bracewell LLP (“Bracewell”), as its general bankruptcy and restructuring counsel, Opportune, LLP (“Opportune”) as its restructuring advisor, Opportune Partners, LLC (“Opportune Partners”) as its sell-side advisors, and Gregg Laswell as its chief restructuring officer (“CRO”).

As of the date hereof, the Debtor estimates that, as of the Effective Date, the total amount of unpaid Allowed Administrative Expense Claims will be approximately $1.5 million. The amount of Allowed Administrative Expense Claims will consist primarily of unpaid Professional Fees and U.S. Trustee Fees.

1.8.4 The Bidding Procedures, Sale Motion and Sale of Substantially All Assets

On April 6, 2020, the Debtor filed its Emergency Motion for (A) Entry of an Order (I) Approving Bidding Procedures; (II) Approving Procedures for the Assumption and Assignment of Executory Contracts and Unexpired Lease; (III) Scheduling Bidding Deadlines, Auction Date, and Sale Hearing Date; (IV) Approving Form and Notice Thereof; (B) Entry of an Order After the Sale Hearing (I) Authorizing the Debtor to Sell Its Assets; and (II) Authorizing the Debtor to Assume and Assign Certain Executory Contracts and Unexpired Leases; and (C) Approval of Related Relief [Dkt. No. 47] (the “Bidding Procedures Motion”), which, among other things, sought an entry of an order: (i) approving bidding procedures (the “Bidding Procedures”) in connection with the sale of the Debtor’s Assets; and (ii) scheduling bid deadlines, a sale objection deadline, an auction date, and a sale hearing date. On April 23, 2020 the Court entered the Order Approving Bidding Procedures; Approving Procedures for the Assumption and Assignment of Contracts and Leases; Scheduling Bidding Deadlines, Auction Date, and Sale Hearing Date; And Approving Form and Notice Thereof [Dkt. No. 104].

Pursuant to the Bidding Procedures, Opportune and Opportune Partners initiated a public marketing campaign for the Debtor’s assets. The Debtor eventually received 17 “Qualifying Bids” (as defined in the Bidding Procedures), one of which, the Continental Resources, Inc. bid, was selected as the highest and best offer going into the Auction. As a consequence of receiving multiple Qualifying Bids, the Debtor held an Auction on June 25, 2020. At the conclusion of the Auction, MP III Echo, LLC was determined to be the Successful Bidder for the Assets and Benchmark Energy, LLC was determined to be the Back-up Bidder for the Assets.


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The Bankruptcy Court entered the Sale Order on July 2, 2020, and the sale to Bricktown Energy, LLC (as designee of MP III Echo, LLC) closed on July 31, 2020. As a result of the sale, the Debtor received $32,958,580.00 of aggregate gross proceeds.

1.8.5 Preference and Other Potential Avoidance Actions

The Bankruptcy Code preserves the Debtor’s right to prosecute claims and causes of action which exist outside of bankruptcy, and also empowers the Debtor to prosecute certain claims which are established by the Bankruptcy Code, including claims to avoid and recover preferential transfers and fraudulent conveyances. As described below, the Plan preserves all of the Debtor’s rights in respect of all Causes of Action, retains such action in the Reorganized Debtor, and empowers the Plan Administrator to prosecute, collect, and/or settle the Causes of Action as deemed appropriate.

On May 5, 2020 the Debtor filed its Bankruptcy Schedules, which includes, among other things, a list of potentially preferential transfers made within the preference period and payments that may be subject to Avoidance Actions. Those lists of payments are attached hereto as Exhibit C.

For the avoidance of doubt, the Debtor reserves all Causes of Action against Echo E&P, LLC, [Echo IT], Echo LLC, Echo Investment Partner, LLC, CWC Holdings, LLC, Southern Echo, LLC, Christian Kanady, Patrick Collins, Cartesian Equity Management, LLC, Collins Permian LP, Wallace Family Partnership, LP, HPS Investment Partners, LLC, and any affiliate of the foregoing including but not limited to those that are a result of the payments (including as initial transferee, mediate transferee, immediate transferee, or otherwise) described on Exhibit C.

IN REVIEWING THIS DISCLOSURE STATEMENT AND THE PLAN, AND IN DETERMINING WHETHER TO VOTE IN FAVOR OF OR AGAINST THE PLAN, HOLDERS OF CLAIMS AND INTERESTS (INCLUDING PARTIES THAT RECEIVED PAYMENTS FROM THE DEBTOR WITHIN NINETY (90) DAYS (OR ONE YEAR WITH RESPECT TO INSIDERS) PRIOR TO THE PETITION DATE) AS WELL AS INSIDERS AND AFFILIATES OF THE DEBTORS (INCLUDING THOSE INSIDERS AND AFFILIATES WHO MANAGED OR ENGAGED IN TRANSACTIONS WITH THE DEBTOR) SHOULD CONSIDER THAT A CAUSE OF ACTION MAY EXIST AGAINST THEM, THAT THE PLAN PRESERVES ALL CAUSES OF ACTION, AND THAT THE PLAN AUTHORIZES THE PLAN ADMINISTRATOR TO PROSECUTE ANY AND ALL SUCH CAUSES OF ACTION.

1.8.6 Adversary Proceedings

No adversary proceedings have been filed in this Chapter 11 Case.

1.8.7 Exclusivity

The Debtor has the exclusive right to file a plan in its Chapter 11 Case until October 20, 2020, and the exclusive right to solicit acceptances until December 21, 2020.


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ARTICLE II CLASSIFICATION AND TREATMENT

OF CLAIMS AND INTERESTS

2.1 Introduction

The categories of Claims and Interests set forth below classify Claims and Interests for all purposes, including for purposes of voting, Confirmation and distribution pursuant to the Plan and Bankruptcy Code sections 1122 and 1123(a)(l). A Claim or Interest shall be deemed classified in a particular Class only to the extent that it qualifies within the description of such Class, and shall be deemed classified in other Classes to the extent that any portion of such Claim or Interest qualifies within the description of such other Classes. A Claim or Interest shall be deemed classified in a Class only to the extent that such Claim or Interest is Allowed and has not been paid, released, or otherwise settled prior to the Effective Date.

All Claims (except for Administrative Claims and Priority Tax Claims, which are not classified pursuant to Bankruptcy Code section 1123(a)(l)) are classified in Section 3.6 through Section 3.12 below.

2.2 Voting; Acceptance by Impaired Classes

Each holder of an Allowed Claim or Interest in an impaired Class (other than a Claim or Interest that will receive no recovery under the Plan) shall be entitled to vote to accept or reject the Plan. Holders of Claims in Classes not impaired under the Plan shall not be entitled to vote to accept or reject the Plan and shall be presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Classes 1 and 2 are not impaired and hence are presumed to have accepted the Plan. Classes 3, 4, and 5 are impaired and therefore are entitled to vote to accept or reject the Plan. Class 6, which comprises the holders of Interests, will receive no recovery, is impaired and each holder of an Interest is deemed to have voted to reject the Plan pursuant to section 1126(g) of the Bankruptcy Code.

2.3 Cramdown

If none of the impaired Classes vote to accept the Plan by the requisite statutory majorities, the Debtor reserves the right to amend the Plan. With respect to Class 6 that is deemed to reject the Plan and any other Class of Claims that rejects the Plan, the Debtors shall request that the Bankruptcy Court confirm the Plan pursuant to Bankruptcy Code § 1129(b).

2.4 U.S. Trustee Fees

All fees payable pursuant to 28 U.S.C. § 1930(a) shall be paid in full in Cash by the Debtor (before the Effective Date) or the Reorganized Debtor (on and after the Effective Date) for each quarter (including any fraction therein) until the Chapter 11 Case is converted, dismissed, or a final decree is issued, whichever occurs first.


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2.5 Administrative Claims

Except to the extent that any holder of an Allowed Administrative Claim agrees to a less favorable treatment, each holder of an Allowed Administrative Claim shall receive from the Reorganized Debtor, in full satisfaction, release and discharge of and in exchange for such Allowed Administrative Claim the amount of such Allowed Administrative Claim, in Cash, on or as soon as practicable after the later of: (i) the Effective Date; (ii) the date that is fourteen (14) days after the date such Administrative Claim is Allowed; and (iii) such other date as may be agreed upon in writing by the holder of such Administrative Claim and by the Debtor, or, after the Effective Date, the Reorganized Debtor; provided, however, that Allowed Administrative Claims representing obligations incurred in the ordinary course of business of the Debtor, if any, shall be paid in full in accordance with the terms and conditions of the particular transactions and any applicable agreements.

2.6 Priority Tax Claims

Except to the extent that any holder of an Allowed Priority Tax Claim agrees to less favorable treatment, each holder of an Allowed Priority Tax Claim shall receive from the Reorganized Debtor, in full satisfaction, release and discharge of and in exchange for such Allowed Priority Tax Claim, the amount of such Allowed Priority Tax Claim, in Cash, on or as soon as practicable after the latest of: (i) the Effective Date; (ii) the date that is fourteen (14) days after the date such Claim is Allowed; or (iii) such other date as may be agreed upon in writing by the holder of such Claim and the Debtor, or, after the Effective Date, the Reorganized Debtor.

2.7 Class 1 – Priority Claims

Unless the holder of a Priority Claim and the Debtor or, after the Effective Date, the Reorganized Debtor, agree to different treatment, each holder of a Priority Claim shall receive, in full and final satisfaction, settlement, release and discharge of, and in exchange for such Claim, the amount of such Allowed Priority Claim in Cash on or as soon as practicable after the latest of: (i) the Effective Date; (ii) the date that is fourteen (14) days after the date such Claim is Allowed; or (iii) such other date as may be agreed upon in writing by the holder of such Claim.

2.8 Class 2 – Other Secured Claims

Unless the holder of an Other Secured Claim and the Debtor or, after the Effective Date, the Reorganized Debtor, agree to different treatment, each holder of an Other Secured Claim shall receive, in accordance with the priority of such Other Secured Claim with respect to the collateral securing such claim, in full and final satisfaction, settlement, release and discharge of, and in exchange for such Claim, either: (i) the amount of such Allowed Other Secured Claim in Cash on or as soon as practicable after the latest of (a) the Effective Date, (b) the date that is fourteen (14) days after the date such Claim is Allowed, or (c) such other date as may be agreed upon in writing by the holder of such Claim; or (ii) the return of the applicable collateral in satisfaction of the Allowed amount of such Other Secured Claim; provided, however, that the Allowed amount of an Other Secured Claim shall be limited to the value of the holder’s interest in the collateral securing such claim after taking into consideration other prior liens on the same


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collateral, if any. Upon satisfaction of such Allowed Claim as set forth herein, any Liens securing such Other Secured Claim shall be deemed released.

2.9 Class 3 – Prepetition Lenders’ Secured Claim

On the Effective Date, to the extent the Prepetition Lenders’ Secured Claim has not been previously satisfied, the Agent shall receive, in full and final satisfaction, settlement, release and discharge of, and in exchange for such Allowed Prepetition Lenders’ Secured Claim, either (i) an amount, in Cash, equal to the proceeds of the collateral securing the Prepetition Secured Lenders’ Claim, as held by the estate on the Effective Date or as received by the Reorganized Debtor after the Effective Date, or (ii) the return of the applicable collateral in satisfaction of the Allowed amount of such Prepetition Lenders’ Secured Claim; provided, however, that in the event there is a Wind Down Budget Shortfall, the amount of Cash distributed on account of the Prepetition Lenders’ Secured Claim shall be decreased by the amount of the Prepetition Lenders’ Budget Contribution.

2.10 Class 4 – General Unsecured Claims

Subject to Section 4.13, each holder of an Allowed General Unsecured Claim shall receive, in full satisfaction, release and discharge of and in exchange for all of their respective Allowed General Unsecured Claim, on or as soon as reasonably practicable after the Effective Date, their Pro Rata share, in Cash, of the Available Assets remaining after satisfaction in full of Allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Priority Claims (each in accordance with the Plan), and the amount of Cash necessary to fund the Wind Down Budget.

2.11 Class 5 – Subordinated Claims

Class 5 shall consist of all Class 5 claims which are determined by the Bankruptcy Court to be subject to equitable subordination. All Class 5 Claims shall be and remain subject to all estate defenses and all Avoidance Claims, including any rights of offset, recoupment, and/or to an affirmative recovery against the Holder of any Class 4 Claim.

Each holder of an Allowed Subordinated Claim, including shall receive, in full

satisfaction, release and discharge of and in exchange for all of their respective Allowed Subordinated Claim, on or as soon as reasonably practicable after the Effective Date, their Pro Rata share, in Cash, of the Available Assets remaining after satisfaction in full of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Claims, the Prepetition Lenders’ Secured Claim (each in accordance with the Plan), Allowed General Unsecured Claim and payment of, or provision for, all other amounts payable under the Wind Down Budget.

2.12 Class 6 – Interests

On the Effective Date, all Interests shall be cancelled and extinguished, and the holders of Interests shall not receive or retain any property or assets on account of their Interests.


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2.13 Summary of Proposed Distributions under the Plan

The table below summarizes the estimated distributions to be made on account of prepetition Claims and Interests under the Plan.

Class Type of Claim Estimate of Allowed Claims

Estimate Percentage of Recovery

1 Priority Claims $0.00 100%

2 Other Secured Claims $7.7 million 100%

3 Prepetition Lenders’ Secured Claims

$80.5 million 34%

4 General Unsecured Claims $53.0 million 0%

5 Subordinated Claims $0.00 0%

6 Interests Unknown 0%

ARTICLE III MEANS FOR IMPLEMENTATION OF THE PLAN

3.1 Sale of the Acquired Assets

The Debtor consummated the sale of the Assets to the Purchaser pursuant to the Purchase Agreement and Sale Order on July 2, 2020.

3.2 Continued Existence; Vesting of Assets

The Debtor shall continue to exist as the Reorganized Debtor after the Effective Date in accordance with the laws of its respective state or applicable jurisdiction of incorporation, formation, or organization and pursuant to its certificate of incorporation, by-laws, articles of formation, operating agreements, and other organizational documents in effect prior to the Effective Date, except to the extent such certificate of incorporation and by-laws are amended under the Plan, or as deemed necessary or appropriate by the Reorganized Debtor to effect the Plan, for the limited purposes of liquidating all of the assets of the bankruptcy estate and making Distributions in accordance with the Plan.

Except as otherwise provided herein, on the Effective Date, all property of the Debtor’s estate, including the Assets and any property held or acquired by the Debtor under the Plan or otherwise, will vest in the Reorganized Debtor free and clear of all Claims, Liens, and charges, other encumbrances, Interests, and other equity interests.


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3.3 The Reorganized Debtor

The Reorganized Debtor shall retain and have all the rights, powers and duties necessary to carry out its responsibilities under the Plan, and as otherwise provided in the Confirmation Order. The Plan Administrator shall be the exclusive representative of the estate following the Effective Date and his or her rights, duties, and obligations shall be determined by the Plan and the Plan Administration Agreement. In the event of an irreconcilable conflict between the Plan Administration Agreement and the provisions of the Plan, the Plan shall control in all respects.

3.4 Plan Administrator

The Plan Administrator shall be a Person to be named in the Plan Supplement, which shall be filed on or before fourteen (14) days before the date of the Confirmation Hearing and shall be wholly incorporated as part of the Plan pursuant to Section 1.3.38 of the Plan. The Plan Administrator shall retain and have all the rights, powers and duties necessary to carry out its responsibilities under the Plan and the Plan Administration Agreement, and as otherwise provided in the Confirmation Order. The Plan Administrator’s liability may be limited by the Plan Administration Agreement to include limitations of liability for negligence and any actions except for gross negligence, willful misconduct or fraud.

3.5 Compensation of the Plan Administrator

The Plan Administrator shall be compensated solely from the Available Assets as provided for in the Wind-Down Budget and pursuant to the terms of the Plan Administration Agreement. Professionals employed by the Reorganized Debtor shall be entitled to reasonable compensation for services rendered and reimbursement of expenses subject to the Wind Down Budget. The payment of the fees and expenses of the Plan Administrator and the Professionals employed by the Reorganized Debtor shall be made in the ordinary course of business in accordance with the Wind Down Budget and shall not be subject to the approval of the Bankruptcy Court; provided that any disputes related to such fees and expenses shall be brought before the Bankruptcy Court.

3.6 Funding of the Wind Down Budget

The Cash necessary to fund the budgeted expenses in the Wind Down Budget shall initially be funded from the proceeds of the sale any unencumbered Assets and, if necessary, from the Prepetition Lenders’ Budget Contribution. Any subsequent recoveries from unencumbered assets of any kind shall be used first to repay the Prepetition Lenders’ Budget Contribution. The Plan Administrator may pay Claims and expenses only as provided under the Plan and the Wind Down Budget, provided that the Plan Administrator may amend the Wind Down Budget with the prior written consent of the Agent.

3.7 Dissolution of the Reorganized Debtor

Within the time determined by the Plan Administrator as necessary or appropriate under the circumstances, the Reorganized Debtor shall be dissolved without any further action by its


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former stockholders, officers, members, or directors. The Plan Administrator may, in his or her discretion, file all necessary certificates of dissolution and take any other actions necessary or appropriate to effect such dissolution under applicable non-bankruptcy law. All applicable regulatory or governmental agencies shall accept any certificates of dissolution or other papers filed by the Plan Administrator on behalf of the Reorganized Debtor and shall take all steps necessary to allow and effect the prompt dissolution as provided herein, without the payment of any fee, tax, or charge and without need for the filing of reports or certificates, except as the Plan Administrator may determine in his or her sole discretion. Upon entry of a final decree in the Bankruptcy Case, if not previously dissolved, the Reorganized Debtor shall be deemed automatically dissolved and wound up without any further action or formality which might otherwise be required under applicable non-bankruptcy laws.

3.8 Powers and Duties of the Plan Administrator

The Plan Administrator shall administer the Assets in accordance with the Plan. The powers of the Plan Administrator shall include any and all powers and authority necessary to implement the Plan including: (i) serving as the sole officer, director and person in control of the Debtor on and after the Effective Date; (ii) liquidating and/or abandoning any of the Assets; (iii) investing Cash; (iv) taking all steps to execute all instruments and documents necessary to effectuate distributions to holders of Allowed Claims in accordance with the Plan including, without limitation, the establishment of any reserves that the Reorganized Debtor, in consultation with the Agent, deems necessary and/or appropriate; (v) paying Allowed Administrative Claims (including Allowed Professional Fee Claims), Allowed Priority Tax Claims, Allowed Priority Claims, Allowed Other Secured Claims, Allowed Prepetition Secured Lenders’ Claims and Allowed General Unsecured Claims in accordance with the Plan; (vi) employing, retaining, terminating or replacing professionals to represent it with respect to its responsibilities or otherwise effectuating the Plan; (vii) paying any and all reasonable fees and expenses of the Reorganized Debtor (if any) and any professionals employed by the Reorganized Debtor without approval of the Bankruptcy Court; (viii) administering and paying taxes, including filing tax returns; (ix) requesting an expedited determination of any unpaid tax liability of the Debtor or Reorganized Debtor under Bankruptcy Code § 505; (x) representing the interests of the Debtor or its post-confirmation estate before any taxing authority in all matters, including any action, suit, proceeding or audit; (xi) taking all steps reasonably necessary and practicable to terminate the corporate existence of the Debtor in accordance with the Plan; (xii) having the sole authority to prosecute any of the Causes of Action and having the authority to compromise, settle, resolve, discontinue, abandon or dismiss all such actions without approval of the Bankruptcy Court, subject to the consent of the Agent; provided that, in the event the Agent does not consent, the Plan Administrator may seek Bankruptcy Court approval of the proposed compromise, settlement, resolution, discontinuance, abandonment, or dismissal of the subject Cause of Action; and (xiii) exercising such other powers as may be vested in it pursuant to order of the Bankruptcy Court, the Plan, or as it reasonably deems to be necessary and proper to carry out the provisions of the Plan.

3.9 Cancellation of Interests

On the Effective Date, all Interests in the Debtor shall be terminated and extinguished and any certificates or other documents that previously evidenced ownership of those Interests shall


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be deemed canceled (all without further action by any Person or the Bankruptcy Court) and shall be null and void and such certificates and documents shall evidence no rights or Interests in the Debtor.

3.10 Termination of Status; Managers, Directors and Officers

From and after the Effective Date, the Reorganized Debtor shall not be required to file any document, or take any other action, or obtain any approval from the Debtor’s managers, directors or officers, to withdraw its business operations from any states in which the Debtor previously conducted its business operations.

On the Effective Date: (i) the positions of the current managers, directors and officers (such persons and the corporate directors collectively, the “Governors”) of the Debtor shall be eliminated, and each Governor shall be terminated (without the necessity of further action); and (ii) to the fullest extent permitted by applicable law, the rights, powers, and duties of the Governors of the Debtor shall vest in the Plan Administrator and the Plan Administrator shall be the sole Governor of the Debtor.

3.11 Resignation/Removal of Plan Administrator

The Plan Administrator may resign or be removed upon application to the Bankruptcy Court. Any successor Plan Administrator shall be selected by the Agent and notice of the successor Plan Administrator shall be filed with file with the Bankruptcy Court.

3.12 Distribution Procedures

Any payments or distributions to be made by the Reorganized Debtor to holders of Claims as required by the Plan shall be made only to the holders of Allowed Claims. Any payments or distributions to be made by the Reorganized Debtor pursuant to the Plan shall be made on or about the Effective Date of such Plan, or as soon thereafter as practicable, except as otherwise provided for in the Plan. Any payment, delivery or distribution by the Reorganized Debtor pursuant to the Plan, to the extent delivered by the United States mail, shall be deemed made when deposited by the Reorganized Debtor into the United States mail. Distributions or deliveries required to be made by the Plan on a particular date shall be deemed to have been made on such date if actually made on such date or as soon thereafter as practicable taking into account the need to establish reserves and account for Disputed Claims. No payments or other distributions of property shall be made on account of any Claim or portion thereof unless and until such Claim or portion thereof is Allowed.

The Reorganized Debtor may establish reserves for Disputed Claims from amounts that would otherwise be available to pay such Disputed Claims in an amount equal to the aggregate distributions which would be made on account of such Disputed Claims if they were Allowed or in such other amount as may be determined by the Bankruptcy Court. The Reorganized Debtor may defer or delay distributions to ensure an equitable and ratable distribution to holders of Allowed Claims, in accordance with the terms of the Plan. The Reorganized Debtor will make no distributions upon a Claim held by a party against whom the Reorganized Debtor asserts any


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Avoidance Action or may assert any Avoidance Action until resolution of the Avoidance Action by settlement or judgment or as otherwise provided by Bankruptcy Court order.

The Reorganized Debtor or Plan Administrator, as applicable, shall make interim distributions no less than once per month, except as may otherwise be agreed by the Agent; provided, however, if any interim distribution would be less than $10,000, the Reorganized Debtor or Plan Administrator, as applicable, shall not be required to make such interim distributions until it accumulates to an amount equal to or greater than a total of $10,000. Pursuant to such interim distributions, the Reorganized Debtor or Plan Administrator shall distribute all Cash then held in the estate other than Cash reserved (i) to fund the Wind Down Budget pursuant to section 7.6 hereof and (ii) on account of Disputed Claims pursuant to the immediately preceding paragraph.

3.13 Accounting and Reporting

The Plan Administrator shall maintain an accounting of receipts and disbursements with respect to the Reorganized Debtor, which shall be open to inspection and review by the Bankruptcy Court and any holder of an Allowed Claim against the Reorganized Debtor, upon reasonable notice to the Plan Administrator. After the Effective Date, the Plan Administrator shall continue the reporting obligations for the Estate of the Reorganized Debtor pursuant to U.S. Trustee guidelines until the Bankruptcy Court enters a final decree closing the Chapter 11 Case of the Reorganized Debtor. After the Effective Date, on the 20th day following the end of the calendar quarter, the Plan Administrator shall provide the Agent with an accounting of all receipts and disbursements with respect to the Reorganized Debtor.

3.14 Books and Records

Any attorney, accountant, or other person including Echo E&P, LLC and Echo Energy, LLC, that holds the Debtor’s recorded information, including books, documents, records, and papers, relating to the Debtor’s property or financial affairs, shall turn over or disclose such recorded information to the Debtor and Plan Administrator upon written notice by the Plan Administrator. Books, records and information shall include data and information ordinary and customarily available pursuant to Section 542 of the Bankruptcy Code or pursuant to any contract or right held by the Debtor.

3.15 Preservation of Rights of Action

Any and all Causes of Action that the Debtor or its estate may hold against any Person, other than any action or claim released pursuant to Article XV of the Plan, shall automatically vest in the Reorganized Debtor as Available Assets. The Reorganized Debtor, and only the Reorganized Debtor, through its authorized agents and representatives may pursue and enforce any and all such Causes of Action. The Reorganized Debtor shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing subject only to the prior written consent of the Agent and without further notice to or action, order, or approval of the Bankruptcy Court.


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If there is disagreement between the Reorganized Debtor and the Agent, then the Reorganized Debtor will seek approval of the Bankruptcy Court before taking such action.

Any and all claims, causes of action, defenses, and counterclaims of or accruing to the Debtor or its estate related to the Causes of Action shall be transferred to the Reorganized Debtor, whether or not litigation relating thereto is pending on the Effective Date, and whether or not any such rights, claims, causes of action, defenses and counterclaims have been listed or referred to in the Plan, the Bankruptcy Schedules or any other document filed with the Bankruptcy Court. The Reorganized Debtor does not waive, relinquish, or abandon (nor shall it be estopped or otherwise precluded from asserting) any right, claim, cause of action, defense, or counterclaim that constitutes a Cause of Action (i) whether or not such right, claim, cause of action, defense, or counterclaim has been listed or referred to in the Plan, the Bankruptcy Schedules or any other document filed with the Bankruptcy Court; (ii) whether or not such right, claim, cause of action, defense, or counterclaim is currently known to the Debtor; and (iii) whether or not a defendant in any litigation relating to such right, claim, cause of action, defense or counterclaim filed a Proof of Claim in the Chapter 11 Case, filed a notice of appearance or any other pleading or notice in the Chapter 11 Case, voted for or against the Plan, or received or retained any consideration under the Plan. Specifically, additional Causes of Action may be discovered and pursued against the Insiders and Affiliates and additional Causes of Action may also be discovered and pursued against other Insiders and Affiliates and/or subsequent transferees of such Insiders and Affiliates.

Without in any manner limiting the generality of the foregoing, notwithstanding any otherwise applicable principle of law or equity, without limitation, any principles of judicial estoppel, res judicata, collateral estoppel, issue preclusion, or any similar doctrine, the failure to list, disclose, describe, identify, or refer to a right, claim, cause of action, defense, or counterclaim, or potential right, claim, cause of action, defense, or counterclaim, in the Plan, the Bankruptcy Schedules, or any other document filed with the Bankruptcy Court shall in no manner waive, eliminate, modify, release, or alter the Reorganized Debtor’s right to commence, prosecute, defend against, settle, and realize upon any rights, claims, causes of action, defenses, or counterclaims that is a Cause of Action as of the Effective Date.

3.16 Effectuating Documents; Further Reorganization Transactions

The Reorganized Debtor, shall be authorized to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other agreements or documents, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The Reorganized Debtor shall be authorized to certify or attest to any of the foregoing actions.

3.17 Exemption from Certain Transfer Taxes

Pursuant to Bankruptcy Code section 1146(a), the issuance, transfer, or exchange of a security, or the making of delivery of an instrument of transfer, provided under the Plan, from the Debtor to the Reorganized Debtor or any other Person pursuant to the Plan may not be taxed under any law imposing a stamp tax or similar tax, and the Confirmation Order shall direct the appropriate state or local governmental officials or agents to forego the collection of any such tax


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or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.

3.18 Closing of the Chapter 11 Case

The Reorganized Debtor and the Plan Administrator, in consultation with the Agent, shall have authority to seek to close the Chapter 11 Case in accordance with the Bankruptcy Code and the Bankruptcy Rules.

ARTICLE IV THE SOLICITATION; VOTING PROCEDURES

4.1 Solicitation Package

Accompanying this Disclosure Statement for the purpose of soliciting votes on the Plan are copies of: (i) the Plan; (ii) the notice of, among other things, the time for submitting Ballots to accept or reject the Plan, the date, time, and place of the hearing to consider Confirmation of the Plan and related matters, and the time for filing objections to Confirmation of the Plan; and, as applicable, (iii) a Ballot (as defined in the Bankruptcy Court’s order approving solicitation procedures for the Plan (the “Solicitation Order”)[Dkt. No. [●]]) or Ballots (and return envelope(s)) that you may use in voting to accept or to reject the Plan; or (iv) a notice of non-voting status, (collectively the “Solicitation Package”). Only Holders eligible to vote in favor of or against the Plan will receive a Ballot as part of their Solicitation Package. If you did not receive a Ballot and believe that you should have, please contact the Debtor’s counsel at the address or telephone number set forth in 16.14.

4.2 Voting Instructions

After carefully reviewing the Plan and this Disclosure Statement, and the Exhibits thereto, and the detailed instructions accompanying your Ballot, please indicate your acceptance or rejection of the Plan by voting in favor of or against the Plan on the enclosed Ballot. Please complete and sign your Ballot and return it in the envelope provided so that it is RECEIVED by the Voting Agent (as defined in the Solicitation Order) on or before the Plan Voting Deadline (as defined in the Solicitation Order) set forth on the Ballot.

Each Ballot has been coded to reflect the Class of Claims it represents. Accordingly, in voting to accept or reject the Plan, you must use only the coded Ballot or Ballots sent to you with this Disclosure Statement.


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If you have any questions about the procedure for voting your eligible Claim or with respect to the Solicitation Package that you have received, please contact the Voting Agent:

Bracewell LLP Attn: Caroline W. Ellis

711 Louisiana Street Suite 2300

Houston, Texas 77002 (713) 221-2300

IN ORDER FOR YOUR VOTE TO BE COUNTED, YOUR VOTE MUST BE

ACTUALLY RECEIVED BY THE VOTING AGENT FOR THE DEBTOR ON OR BEFORE SEPTEMBER 25, 2020 AT THE ABOVE ADDRESS. EXCEPT TO THE EXTENT ALLOWED BY THE BANKRUPTCY COURT OR DETERMINED OTHERWISE BY THE DEBTOR, BALLOTS RECEIVED AFTER THE PLAN VOTING DEADLINE WILL NOT BE ACCEPTED OR USED IN CONNECTION WITH THE DEBTOR’S REQUEST FOR CONFIRMATION OF THE PLAN OR ANY MODIFICATION THEREOF.

ONLY BALLOTS WITH ORIGINAL SIGNATURES WILL BE COUNTED. BALLOTS WITH COPIED SIGNATURES WILL NOT BE ACCEPTED OR COUNTED. YOU MAY NOT SUBMIT A BALLOT BY FACSIMILE. YOU MAY SUBMIT A BALLOT BY EMAIL TO [email protected], BY SCANNING AN ORIGINAL SIGNATURE AND SENDING IN .PDF FORMAT. ONLY ORIGINAL BALLOTS (OR SCANNED ORIGINAL BALLOTS IN THE CASE OF BALLOTS SUBMITTED BY EMAIL) RECEIVED BY THE VOTING AGENT BY THE PLAN VOTING DEADLINE WILL BE COUNTED.

4.3 Voting Tabulation

Under the Bankruptcy Code, for purposes of determining whether the requisite acceptances have been received, only Holders who actually vote will be counted. The failure of a Holder to deliver a duly executed Ballot will be deemed to constitute an abstention by such Holder with respect to voting on the Plan and such abstentions will not be counted as votes for or against the Plan.

Unless otherwise ordered by the Bankruptcy Court, Ballots that are signed, dated, and timely received, but on which a vote to accept or reject the Plan has not been indicated, will not be counted. The Debtor, in its sole discretion, may request that the Voting Agent attempt to contact such voters to cure any such defects in the Ballots.

Except as provided below, unless the applicable Ballot is timely submitted to the Voting Agent before the Plan Voting Deadline, together with any other documents required by such Ballot, the Debtor may, in its sole discretion, reject such Ballot as invalid and decline to utilize it in connection with seeking Confirmation of the Plan.


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A vote may be disregarded if the Bankruptcy Court determines, pursuant to Bankruptcy Code section 1126(e), that it was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code.

If a Ballot is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or another acting in a fiduciary or representative capacity, such Person should indicate such capacity when signing and, unless otherwise determined by the Debtor, must submit proper evidence satisfactory to the Debtor of authority to so act.

The period during which Ballots with respect to the Plan will be accepted by the Debtor will terminate on the Plan Voting Deadline. Except to the extent permitted by the Bankruptcy Court, Ballots that are received after the Plan Voting Deadline will not be counted or otherwise used by the Debtor in connection with the Debtor’s request for Confirmation of the Plan (or any permitted modification thereof). IN NO CASE SHOULD A BALLOT BE DELIVERED TO ANY ENTITY OTHER THAN THE VOTING AGENT.

4.4 Agreements upon Furnishing Ballots

The delivery of an accepting Ballot to the Voting Agent by a Holder pursuant to one of the procedures set forth above will constitute the agreement of such Holder to accept: (i) all of the terms of, and conditions to, the solicitation and voting procedures approved by the Bankruptcy Court and (ii) the terms of the Plan; provided, however, all parties in interest retain their right to object to Confirmation of the Plan pursuant to Bankruptcy Code section 1128.

ARTICLE V FEASIBILITY, BEST INTEREST OF THE CREDITORS

AND LIQUIDATION

5.1 Feasibility of the Plan

Section 1129(a)(11) of the Bankruptcy Code requires that confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtor or any successor to the Debtor under the Plan, unless such liquidation or reorganization is proposed in the Plan. The Plan proposed by the Debtor provides for a liquidation of the Debtor’s remaining assets and a distribution of Cash to creditors in accordance with the priority scheme of the Bankruptcy Code and the terms of the Plan. The ability of the Plan Administrator to make the Distributions described in the Plan does not depend on future earnings of the Debtor. Accordingly, the Debtor believes that the Plan is feasible and meets the requirements of section 1129(a)(11) of the Bankruptcy Code.

5.2 Best Interest of Creditors Test

Before the Plan may be confirmed, the Bankruptcy Court must find (with certain exceptions) that the Plan provides, with respect to each Class, that each Holder of a Claim or interest in such Class either: (i) has accepted the Plan; or (ii) will receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the amount that such person would receive or retain if the Debtor liquidated under chapter 7 of the Bankruptcy Code. In


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chapter 7 liquidation cases, unsecured creditors and interest holders of a debtor are paid from available assets generally in the following order, with no junior Class receiving any payments until all amounts due to senior Classes have been paid fully or any such payment is provided for:

• Secured creditors (to the extent of the value of their collateral);

• Administrative and other priority creditors;

• Unsecured creditors;

• Debt expressly subordinated by its terms or by order of the Bankruptcy Court; and

• Interest holders.

To determine if the Plan is in the best interests of each impaired Class, the value of the distributions from the proceeds of a liquidation of the Debtor’s unencumbered assets and properties, after subtracting the amounts attributable to the foregoing claims and expenses, are then compared with the value of the property offered to such Classes of Claims and Interests under the Plan.

As described in the liquidation discussion set forth in 9.1 hereof, and as detailed in the liquidation attached hereto as Exhibit B, the Debtor believes that the value of any distributions in a chapter 7 case would be less than the value of distributions under the Plan because, among other reasons, there would be increased costs and administrative expenses depleting the resources of the Debtor’s estate and distributions in a chapter 7 case may not occur for a longer period of time, thereby reducing the present value of such distributions. Proceeds received in a chapter 7 liquidation are likely to be significantly discounted due to the distressed nature of the sale, and the Debtor’s estate would have to pay the fees and expenses of a chapter 7 trustee in addition to the Professionals’ pre- conversion fees and expenses (thereby further reducing cash available for distribution). The distribution of the proceeds of a liquidation could be delayed until a chapter 7 trustee and its professionals became knowledgeable about the Chapter 11 Case and the Claims against the Debtor.

ARTICLE VI CONFIRMATION PROCEDURES

6.1 The Confirmation Hearing

Bankruptcy Code section 1128(a) requires the Bankruptcy Court, after notice, to hold a Confirmation hearing (the “Confirmation Hearing”). Bankruptcy Code section 1128(b) provides that any party in interest may object to Confirmation of the Plan.

The Bankruptcy Court has scheduled the Confirmation Hearing for September 29, 2020 at 2:00 p.m., prevailing Central Time, before the Honorable David R. Jones, Chief United States Bankruptcy Judge, United States Bankruptcy Court for the Southern District of Texas at the United States Bankruptcy Court, 1515 Rusk Street, Courtroom 400, Houston, Texas, 77002.


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Objections to Confirmation of the Plan must be filed and served on the Debtor and the other parties set forth in the order approving the Disclosure Statement, and certain other parties, by no later than September 25, 2020 in accordance with the order approving the Disclosure Statement. THE BANKRUPTCY COURT MAY NOT CONSIDER OBJECTIONS TO CONFIRMATION OF THE PLAN IF ANY SUCH OBJECTIONS HAVE NOT BEEN TIMELY SERVED AND FILED IN COMPLIANCE WITH THE ORDER APPROVING THE DISCLOSURE STATEMENT.

The notice of the Confirmation Hearing will contain, among other things, the deadline to object to Confirmation of the Plan, the Plan Voting Deadline, and the date and time of the Confirmation Hearing.

6.2 Statutory Requirements for Confirmation of the Plan

At the Confirmation Hearing, the Bankruptcy Court shall determine whether the requirements of Bankruptcy Code section 1129 have been satisfied. The Debtor believes that the Plan satisfies or will satisfy the applicable requirements, as follows:

• The Plan complies with the applicable provisions of the Bankruptcy Code.

• The Debtor, as Plan proponent, has or will have complied with the applicable provisions of the Bankruptcy Code.

• The Plan has been proposed in good faith and not by any means forbidden by law.

• Any payment made or promised under the Plan for services or for costs and expenses in, or in connection with, the Chapter 11 Case, or in connection with the Plan and incident to the case, has been disclosed to the Bankruptcy Court, and any such payment: (i) made before the Confirmation of the Plan is reasonable; or (ii) is subject to the approval of the Bankruptcy Court as reasonable if it is to be fixed after the Confirmation of the Plan.

• The Debtor, as Plan proponent, has disclosed the identity and affiliations of any individual proposed to serve, after Confirmation of the Plan, as a director, officer, or voting trustee of the Debtor, an Affiliate of the Debtor participating in the Plan with the Debtor, or a successor to the Debtor under the Plan, and the appointment to, or continuance in, such office of such individual is consistent with the interests of creditors and equity security holders and with public policy.

• The Debtor, as Plan proponent, has disclosed the identity of any insider (as defined in Bankruptcy Code section 101) that will be employed or retained by the Reorganized Debtor, and the nature of any compensation for such insider.

• The Plan does not propose any rate change that is subject to approval by a governmental regulatory commission.


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• Either each Holder of an impaired Claim or Interest has accepted the Plan, or will receive or retain under the Plan on account of that Claim or Interest, property of a value, as of the Effective Date of the Plan, that is not less than the amount that the Holder would receive or retain if the Debtor was liquidated on that date under chapter 7 of the Bankruptcy Code.

• Each Class of Claims that is entitled to vote on the Plan has either accepted the Plan or is not impaired under the Plan, or the Plan can be confirmed without the approval of each voting Class pursuant to Bankruptcy Code section 1129(b).

• Except to the extent that the Holder of a particular Claim will agree to a different treatment of its Claim, the Plan provides that Administrative Claims, Priority Tax Claims and, Priority Claims will be paid in full, in Cash, on the Effective Date, or as soon thereafter as practicable.

• At least one Class of impaired Claims will accept the Plan, determined without including any acceptance of the Plan by any insider holding a Claim of that Class.

• Confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of the Debtor or any successors thereto under the Plan unless such a liquidation or reorganization is proposed in the Plan.

• All fees of the type described in 28 U.S.C. § 1930, including the fees of the United States Trustee, will be paid as of the Effective Date.

• The Debtor has no retirement benefit obligations.

The Debtor believes that: (i) the Plan satisfies or will satisfy all of the statutory requirements of chapter 11 of the Bankruptcy Code; (ii) the Debtor has complied or will have complied with all of the requirements of chapter 11; and (iii) the Plan has been proposed in good faith.

6.2.1 Acceptance by Impaired Classes

The Bankruptcy Code requires, as a condition to Confirmation, that, except as described in the following section, each Class of Claims or Interests that is impaired under the Plan accept the Plan. A class that is not impaired under a plan of reorganization or liquidation is deemed to have accepted the plan and, therefore, solicitation of acceptances with respect to such class is not required. A class is impaired unless the plan: (i) leaves unaltered the legal, equitable and contractual rights to which the claim or interest entitles the holder of that claim or equity interest; or (ii) notwithstanding any contractual provision or applicable law that entitles the holder of such claim or interest after the occurrence of a default—(a) cures any such default that occurred before or after the commencement of the case under this title, other than a default of a kind specified in section 365(b)(2) of this title or of a kind that section 365(b)(2) expressly does not require to be cured; (b) reinstates the maturity of such claim or interest as such maturity existed before such default; (c) compensates the holder of such claim or interest for any damages incurred as a result of any reasonable reliance by such holder on such contractual provision or


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such applicable law; and (d) if such claim or such interest arises from any failure to perform a nonmonetary obligation, other than a default arising from failure to operate a nonresidential real property lease subject to section 365(b)(l)(A), compensates the holder of such claim or such interest (other than the debtor or an insider) for any actual pecuniary loss incurred by such holder as a result of such failure; and (e) does not otherwise alter the legal, equitable, or contractual rights to which such claim or interest entitles the holder of such claim or interest.

6.2.2 Confirmation Without Acceptance by All Impaired Classes

Bankruptcy Code section 1129(b) allows a bankruptcy court to confirm a plan, even if an impaired class entitled to vote on the plan has not accepted it, provided that the plan has been accepted by at least one impaired Class. Holders of Allowed Class 6 Interests are deemed to reject the Plan. The Debtor cannot guarantee that other impaired Classes will accept the Plan. If any impaired Class does not accept the Plan, the Debtor intends to seek confirmation of the Plan pursuant to Bankruptcy Code section 1129(b). Bankruptcy Code section 1129(b) states that, notwithstanding an impaired class’s failure to accept a plan of reorganization or liquidation, the plan shall be confirmed, at the plan proponent’s request, in a procedure commonly known as a “cram down,” so long as the plan does not “discriminate unfairly” and is “fair and equitable” with respect to each class of claims or equity interests that is impaired under, and has not accepted, the plan.

The condition that a plan be “fair and equitable” with respect to a non-accepting class of secured creditors includes the following requirements that either: (i) the plan provides that holders of such claims retain the liens securing such claims, whether the property subject to such liens is retained by the debtor or transferred to another entity, to the extent of the allowed amount of such claims and that each holder of a claim of such class receive on account of such claims deferred cash payments totaling at least the allowed amount of such claim, of a value, as of the effective date of the plan, of at least the value of such holder’s interest in the estate’s interest in such property; (ii) the plan provides for the sale, subject to 363(k) of this title, of any property that is subject to the liens securing such claims, free and clear of such liens, with such liens to attach to the proceeds of such sale, and the treatment of such liens on proceeds under (i) or (iii) of this paragraph; or (iii) the plan provides for the realization by such holders of the indubitable equivalent of such claims.

The condition that a plan be “fair and equitable” with respect to a non-accepting class of unsecured claims includes the following requirement that either: (i) the plan provides that each holder of a claim of such class receive or retain on account of such claim property of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or (ii) the holder of any claim or equity interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or equity interest any property.

The Debtor reserves the right to alter, amend, modify, revoke or withdraw the Plan or any Exhibit or Schedule, including to amend or modify it to satisfy Bankruptcy Code section 1129(b), if necessary.


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6.3 Identity of Persons to Contact for More Information

Any interested party desiring further information about the Plan should contact the Voting Agent at the phone number and/or address listed in Section 5.2 of this Disclosure Statement.

ARTICLE VII CERTAIN RISK FACTORS AFFECTING THE DEBTOR

PRIOR TO VOTING TO ACCEPT OR REJECT THE PLAN, ALL HOLDERS OF IMPAIRED CLAIMS SHOULD READ AND CAREFULLY CONSIDER THE FACTORS SET FORTH BELOW, AS WELL AS ALL OTHER INFORMATION SET FORTH OR OTHERWISE REFERENCED IN THIS DISCLOSURE STATEMENT. THESE FACTORS SHOULD NOT, HOWEVER, BE REGARDED AS CONSTITUTING THE ONLY RISKS INVOLVED IN CONNECTION WITH THE PLAN AND ITS IMPLEMENTATION.

7.1 Certain Bankruptcy Law Considerations

Although the Debtor believes that the Plan will satisfy all requirements necessary for Confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will reach the same conclusion. Moreover, there can be no assurance that modifications to the Plan will not be required for Confirmation or that such modifications would not necessitate the re-solicitation of votes. Although the Debtor believes that the Effective Date will occur soon after the Confirmation Date, there can be no assurance as to such timing. In the event the conditions precedent to Confirmation of the Plan have not been satisfied or waived (to the extent possible) by the Debtor or applicable party (as provided in the Plan) as of the Effective Date, then the Confirmation Order will be vacated, no distributions under the Plan will be made, and the Debtor and all Holders of Claims and Interests will be restored to the status quo ante as of the day immediately preceding the Confirmation Date as though such Confirmation Date had never occurred.

ARTICLE VIII ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN

If the Plan is not confirmed and consummated, the alternatives to the Plan include: (i) liquidation of the Debtor under chapter 7 of the Bankruptcy Code; and (ii) an alternative plan.

8.1 Liquidation under Chapter 7

If no plan can be confirmed, the Debtor’s Chapter 11 Case may be converted to a case under chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be appointed (or elected) to liquidate the Debtor’s assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Debtor believes that liquidation under chapter 7 would result in smaller distributions to creditors than those provided for in the Plan because: (i) additional administrative expenses involved in the appointment of a trustee would be incurred; and (ii) additional expenses and claims, some of which would be entitled to priority, might be generated during the liquidation. Specifically, the Debtor’s costs of liquidation under chapter 7 of the Bankruptcy Code would include the fees payable to a chapter 7 trustee, as well


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as those fees that might be payable to attorneys and other professionals that such a trustee might engage. The foregoing types of claims and other claims that might arise in a liquidation case or result from the pending Chapter 11 Case, including any unpaid expenses incurred by the Debtor during the Chapter 11 Case such as compensation for attorneys, financial advisors and accountants, would be paid in full from the liquidation proceeds before the balance of those proceeds would be made available to pay prepetition Allowed General Unsecured Claims or Allowed Interests.

After considering the effects that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to the holders of Claims and Interests in the Chapter 11 Case, including: (i) the increased costs and expenses of a liquidation under chapter 7 of the Bankruptcy Code arising from fees payable to a trustee in bankruptcy and professional advisors to such trustee; (ii) the likely erosion in value of the Debtor’s remaining assets in a chapter 7 case in the context of an expeditious liquidation of and the “forced sale” atmosphere that would prevail under a chapter 7 liquidation; and (iii) the substantial increases in Claims which would be satisfied on a priority basis or on parity with creditors in the Chapter 11 Case, the Debtor has determined that Confirmation of the Plan will provide each holder of an Allowed Claim or Interest with a recovery that is not less than such holder would receive pursuant to a liquidation of the Debtor under chapter 7 of the Bankruptcy Code.

The Debtor’s Liquidation Analysis is attached hereto as Exhibit B. The information set forth in Exhibit B provides a summary of the liquidation values of the Debtor’s assets, assuming a chapter 7 liquidation in which a trustee appointed by the Bankruptcy Court would liquidate the assets of the Debtor’s Estate. The liquidation analysis was prepared by the Debtor.

Underlying the liquidation analysis are a number of estimates and assumptions that, although developed and considered reasonable by management, are inherently subject to significant economic and competitive uncertainties and contingencies beyond the control of the Debtor and its management. The liquidation analysis is also based on assumptions with regard to liquidation decisions that are subject to change. Accordingly, the values reflected might not be realized if the Debtor were, in fact, to undergo such a liquidation. The chapter 7 liquidation period is assumed to be a period of six (6) months, allowing for, among other things, the: (i) the sale of Debtor’s remaining assets; (ii) the wind-down of the Debtor’s affairs by a newly appointed person unfamiliar with the Debtor’s affairs; and (iii) collection of receivables.

8.2 Alternative Plan

If the Plan is not confirmed, the Bankruptcy Court could confirm a different plan. The Debtor believes that the Plan, as described herein, enables holders of Claims and Interests to realize the highest and best value under the circumstances. The Debtor believes that any alternative form of chapter 11 plan is a much less attractive alternative to creditors than the Plan because of the greater returns and certainty provided by the Plan. Other alternatives could involve diminished recoveries, significant delay, uncertainty, and substantial additional administrative costs.


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8.3 Dismissal of Case

If the Debtor's bankruptcy case were to be dismissed, the Debtor would no longer have the protection of the Bankruptcy Court and the applicable provisions of the Bankruptcy Code. The Senior Lenders and the other secured creditors would immediately exercise their rights as secured creditors to foreclose and liquidate the Debtor's most valuable assets. Dismissal would force a race among other creditors to take over and dispose of any remaining assets. In the event of dismissal, even the most diligent unsecured creditors would likely fail to realize any significant recovery on their claims.

ARTICLE IX EXECUTORY CONTRACTS, UNEXPIRED LEASES, AND OTHER AGREEMENTS

9.1 Assumption/Rejection

Except as otherwise provided in the Confirmation Order, on the Effective Date, all of the Debtor’s executory contracts and unexpired leases not previously assumed will be rejected.

9.2 Claims Based on Rejection of Executory Contracts and Unexpired Leases

Unless otherwise provided by a Bankruptcy Court order, any Proofs of Claim asserting Claims arising from the rejection of the Debtor’s executory contracts and unexpired leases pursuant to the Plan or otherwise must be filed no later than thirty (30) days after the later of the Effective Date or the effective date of rejection. Any Proofs of Claim arising from the rejection of the Debtor’s executory contracts or unexpired leases that are not timely filed shall be disallowed automatically, forever barred from assertion, and shall not be enforceable against any Debtor or the Reorganized Debtor without the need for any objection by any Person or further notice to or action, order, or approval of the Bankruptcy Court, and any Claim arising out of the rejection of the executory contract or unexpired lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the Bankruptcy Schedules or a Proof of Claim to the contrary. All Allowed Claims arising from the rejection of the Debtor’s executory contracts and unexpired leases shall be classified as General Unsecured Claims and shall be treated in accordance with the particular provisions of the Plan.

9.3 Insurance Policies

Notwithstanding anything to the contrary herein, all insurance policies to which the Debtor has any rights as of the date of the Confirmation Order shall be deemed and treated as executory contracts assumed and assigned to the Reorganized Debtor to the extent such policies are determined to be executory contracts. Nothing therein shall extend to any well and property operations insurance coverage.

9.4 Reservation of Rights

Nothing contained in the Plan shall constitute an admission by the Debtor that any contract or lease is in fact an executory contract or unexpired lease or that the Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was


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executory or unexpired at the time of assumption or rejection, the Reorganized Debtor shall have thirty (30) days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

9.5 Nonoccurrence of Effective Date

In the event that the Effective Date does not occur, the Bankruptcy Court shall retain jurisdiction with respect to any request by the Debtor to extend the deadline for assuming or rejecting unexpired leases pursuant to Bankruptcy Code section 365(d)(4).

ARTICLE X PROCEDURES FOR RESOLVING DISPUTED,

CONTINGENT, AND UNLIQUIDATED CLAIMS

10.1 Objections to Claims

After the Effective Date, the Reorganized Debtor, in consultation with the Agent, shall have the exclusive authority to file objections to all Claims, and the exclusive authority to settle, compromise, or litigate to judgment any objections to Claims that he or she files. If there is disagreement between the Reorganized Debtor and the Agent, then the Reorganized Debtor will seek approval from the Bankruptcy Court before taking such action. The Reorganized Debtor, in consultation with the Agent, may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. If there is disagreement between the Reorganized Debtor and the Agent, the Reorganized Debtor will seek approval of the Bankruptcy Court before taking such action.

10.2 Objection Deadline

As soon as practicable, but no later than the Claims Objection Deadline, the Reorganized Debtor may file objections to Claims with the Bankruptcy Court and serve such objections on the holders of the Claims to which such objections are made. Nothing contained herein, however, shall limit the right of the Reorganized Debtor to object to Claims, if any, filed or amended after the Claims Objection Deadline. The Claims Objection Deadline may be extended by the Bankruptcy Court upon motion by the Debtor or Reorganized Debtor.

For the avoidance of doubt, no Claim is or shall be deemed Allowed, except the Agent’s claim, until the later of the Claims Objection Deadline or the expiration of some other applicable period of limitation fixed by the Bankruptcy Code, Bankruptcy Rules, or Bankruptcy Court, unless otherwise ordered by a Final Order of the Bankruptcy Court or Allowed pursuant to the Plan.

10.3 Estimation of Claims

The Reorganized Debtor may at any time request that the Bankruptcy Court estimate any contingent or unliquidated Claim pursuant to Bankruptcy Code section 502(c), regardless of whether the Reorganized Debtor or the Debtor has previously objected to such Claim or whether the Bankruptcy Court has ruled on any objection, and the Bankruptcy Court will retain


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jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal related to any such objection. In the event the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the Reorganized Debtor may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the aforementioned objection, estimation and resolution procedures are cumulative and are not necessarily exclusive of one another.

10.4 No Distributions Pending Allowance

Notwithstanding any provision in the Plan to the contrary, no distributions, partial or otherwise, shall be made with respect to a Disputed Claim until such Claim becomes an Allowed Claim. Subject to the provisions of the Plan, after a Disputed Claim becomes an Allowed Claim, the holder of such an Allowed Claim will receive all distributions to which such holder is then entitled under the Plan on the next scheduled distribution date or as the Reorganized Debtor otherwise determines in its reasonable discretion. No post-Effective Date interest shall be paid on distributions under Section 10.4 of the Plan. If the holder of a Claim incorporates more than one Claim in a Proof of Claim then: (i) such Claims will be considered one Claim for purposes of the Plan; and (ii) no such Claim will be bifurcated into an Allowed portion and a Disputed portion.

10.5 Distributions after Allowance

As soon as reasonably practicable after the date that an order or judgment of the Bankruptcy Court allowing all or part of any General Unsecured Claim that is a Disputed Claim becomes a Final Order, the Reorganized Debtor shall distribute to the Holder of such Claim the distribution (if any) that would have been made to such Holder had such Allowed General Unsecured Claim been Allowed when distributions were made. After a Disputed Claim becomes an Allowed General Unsecured Claim or is otherwise resolved, any excess Cash or other property that was reserved on account of such Disputed Claim, if any, shall become property of the Reorganized Debtor for the benefit of Allowed General Unsecured Claims.

10.6 Reduction of Claims

Notwithstanding the contents of the Bankruptcy Schedules, Claims listed therein as undisputed, liquidated and not contingent shall be reduced by the amount, if any, that was paid by the Debtor prior to the Effective Date, including pursuant to orders of the Bankruptcy Court. To the extent such payments are not reflected in the Bankruptcy Schedules, such Bankruptcy Schedules will be deemed amended and reduced to reflect that such payments were made. Nothing in the Plan shall preclude the Reorganized Debtor from paying Claims that the Debtor was authorized to pay pursuant to any Final Order entered by the Bankruptcy Court prior to the Effective Date.

10.7 Compliance with Tax Requirements/Allocations

In connection with the Plan, to the extent applicable, the Reorganized Debtor shall comply with all tax withholding and reporting requirements imposed on it by any governmental


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unit, and all distributions thereto shall be subject to such withholding and reporting requirements. Any amounts so withheld from any payment made under the Plan shall be deemed paid to the holder of the Allowed Claim subject to withholding. The Reorganized Debtor may require that each holder complete the appropriate Internal Revenue Service Form W-8BEN, Internal Revenue Service Form W-8BEN-E, or Internal Revenue Service Form W-9, or successor form as applicable, to each holder provided, however, that the sole remedy in the event a holder fails to comply with such a request within six months shall be to make a proper withholding of tax to the extent required by applicable law. Notwithstanding any provision in the Plan to the contrary, the Reorganized Debtor shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of a distribution to be made under the Plan to generate sufficient funds to pay applicable withholding taxes with respect to such distribution, withholding distributions pending receipt of information necessary to facilitate such distribution, or establishing any other mechanisms it believes are reasonable and appropriate. If the Reorganized Debtor fails to withhold with respect to any such holder’s distribution, and is later liable for the amount of such withholding, the holder shall reimburse the Reorganized Debtor. The Reorganized Debtor reserves the right to allocate all distributions made under the Plan in compliance with all applicable wage garnishments, alimony, child support, and other spousal awards, liens and encumbrances. Unless otherwise required by law or provided in the Plan, distributions in respect of Allowed Claims shall be allocated first to the principal amount (as determined for U.S. federal income tax purposes) of such Allowed Claims, and then, to the extent the consideration exceeds the principal amount of such Allowed Claims, to any portion of such Allowed Claims for accrued but unpaid interest.

The Reorganized Debtor will in good faith value the Reorganized Debtor’s Available Assets. The Reorganized Debtor shall make the respective values available from time to time, to the extent relevant, and such values shall be used consistently by the Reorganized Debtor for all U.S. federal income tax purposes.

ARTICLE XI CONDITIONS PRECEDENT TO CONFIRMATION

AND CONSUMMATION OF THE PLAN

11.1 Conditions Precedent to Confirmation

The following are conditions precedent to the occurrence of Confirmation:

11.1.1 The Bankruptcy Court shall have entered an order, in a form reasonably acceptable to the Debtor and the Agent, approving the adequacy of the Disclosure Statement; and

11.1.2 The Confirmation Order approving and confirming the Plan, as such Plan may have been modified, amended or supplemented, shall have been entered in form and substance reasonably acceptable to the Debtor and the Agent.


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11.2 Conditions Precedent to Effective Date

The following are conditions precedent to the occurrence of the Effective Date, each of which must be satisfied or waived in accordance with Section 12.4 below:

11.2.1 The Confirmation Order shall have been entered in form and substance reasonably acceptable to the Debtor and the Agent and such order shall have become a Final Order.

11.2.2 Cash shall have been reserved for all amounts payable under the Wind Down Budget;

11.2.3 No stay of the Confirmation Order is in effect; and

11.2.4 All documents, instruments and agreements, in form and substance satisfactory to the Debtor and the Agent, provided for or necessary to implement the Plan have been executed and delivered.

11.3 Substantial Consummation

On the Effective Date, the Plan shall be deemed to be substantially consummated under Bankruptcy Code section 1101(2).

11.4 Waiver of Conditions

Each of the conditions set forth in Section 12.2 hereof may be waived in whole or in part by the Debtor and the Agent. The failure to satisfy or waive any condition to the Effective Date may be asserted by the Debtor and the Agent regardless of the circumstances giving rise to the failure of such condition to be satisfied.

11.5 Revocation, Withdrawal, or Non-consummation

The Debtor reserves the right to revoke or withdraw the Plan at any time prior to the Confirmation Date and to file subsequent plans. If the Debtor revokes or withdraws the Plan, or if Confirmation or substantial consummation of the Plan does not occur, then: (i) the Plan shall be null and void in all respects; (ii) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain of any Claim or Class of Claims) unless otherwise agreed to by the Debtor and any counterparty to such settlement or compromise, and any document or agreement executed pursuant to the Plan shall be deemed null and void; and (iii) nothing contained in the Plan, and no acts taken in preparation for Consummation of the Plan, shall (a) constitute or be deemed to constitute a waiver or release of any Claims by or against, or any Interests in, the Debtor or any other Person, (b) prejudice in any manner the rights of the Debtor or any Person in any further proceedings involving the Debtor, or (c) constitute an admission of any sort by the Debtor or any other Person.


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ARTICLE XII AMENDMENTS AND MODIFICATIONS

The Debtor may alter, amend, or modify the Plan under Bankruptcy Code section 1127(a) at any time prior to the Confirmation Date with the reasonable consent of the Agent. After the Confirmation Date and prior to “substantial consummation” of the Plan, as defined in Bankruptcy Code section 1101(2), the Debtor may, under Bankruptcy Code section 1127(b), institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in the Plan, the Disclosure Statement or the Confirmation Order, and such matters as may be necessary to carry out the purposes and effects of the Plan, so long as such proceedings do not materially adversely affect the treatment of holders of Claims or Interests under the Plan; provided, however, that prior notice of such proceedings shall be served in accordance with the Bankruptcy Rules or order of the Bankruptcy Court.

ARTICLE XIII RETENTION OF JURISDICTION

Under Bankruptcy Code sections 105(a) and 1142, and notwithstanding entry of the Confirmation Order and occurrence of the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters arising out of, or related to, the Chapter 11 Case and the Plan to the fullest extent permitted by law, including, among other things, jurisdiction to:

(A) Allow, disallow, determine, liquidate, classify, estimate or establish the priority or Secured or unsecured status of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any objections to the Secured or unsecured status, priority, amount or allowance of Claims or Interests;

(B) Hear and determine all applications for compensation and reimbursement of expenses of Professionals under Bankruptcy Code sections 327, 328, 330, 331, 503(b), or 1129(a)(4);

(C) Hear and determine all matters with respect to the assumption or rejection of any executory contract or unexpired lease to which the Debtor is a party or with respect to which the Debtor may be liable, including, if necessary, the nature or amount of any required cure or the liquidating of any claims arising therefrom;

(D) Hear and determine any and all adversary proceedings, motions, applications, and contested or litigated matters arising out of, under, or related to, the Chapter 11 Case, including, but not limited to all Avoidance Actions;

(E) Enter and enforce such orders as may be necessary or appropriate to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement or the Confirmation Order;


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(F) Hear and determine disputes arising in connection with the interpretation, implementation, Consummation, or enforcement of the Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan;

(G) Consider any modifications of the Plan, cure any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

(H) Issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Person with implementation, Consummation, or enforcement of the Plan or the Confirmation Order;

(I) Enter and implement such orders as may be necessary or appropriate if the Confirmation Order is for any reason reversed, stayed, revoked, modified, or vacated;

(J) Hear and determine any matters arising in connection with or relating to the Plan, the Disclosure Statement, the Confirmation Order or any other contract, instrument, release, or other agreement or document created in connection with the Plan, the Disclosure Statement or the Confirmation Order;

(K) Enforce all orders, judgments, injunctions, releases, exculpations, indemnifications and rulings entered in connection with the Chapter 11 Case or pursuant to the Plan;

(L) Recover all assets of the Debtor and property of the estate, wherever located;

(M) Hear and determine matters concerning state, local, and federal taxes in accordance with Bankruptcy Code sections 346, 505, and 1146;

(N) Hear and determine all disputes involving any releases granted in the Plan;

(O) Hear and determine such other matters as may be provided in the Confirmation Order or as may be authorized under, or not inconsistent with, provisions of the Bankruptcy Code;

(P) Enter an order or final decree concluding or closing the Chapter 11 Case; and

(Q) Enforce all orders previously entered by the Bankruptcy Court.

ARTICLE XIV COMPROMISES AND SETTLEMENTS

Pursuant to Bankruptcy Code section 363 and Bankruptcy Rule 9019, and in consideration for the classification, distribution and other benefits provided under the Plan, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims, Interests and controversies resolved pursuant to the Plan, including, without limitation, all


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Claims arising prior to the Petition Date, whether known or unknown, foreseen or unforeseen, asserted or unasserted, arising out of, relating to or in connection with the business or affairs of, or transactions with, the Debtor. The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of each of the foregoing compromises or settlements, and all other compromises and settlements provided for in the Plan, and the Bankruptcy Court’s findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtor, the estate, holders of Claims and other parties in interest, and are fair, equitable and within the range of reasonableness.

ARTICLE XV MISCELLANEOUS PROVISIONS

15.1 Bar Dates for Certain Actions

15.1.1 Administrative Claims and Professional Fee Claims

All requests for payment or any other means of preserving and obtaining payment of Administrative Claims (including Professional Fee Claims) that have not been paid in the ordinary course, released or otherwise settled, must be filed with the Bankruptcy Court and served upon the Reorganized Debtor no later than the Administrative Claims Bar Date. Any request for payment of Administrative Claims that is not filed by the Administrative Claims Bar Date will be forever disallowed and barred, and holders of such Claims will not be able to assert such Claims in any manner against the Debtor, the Debtor’s estate, the Reorganized Debtor or any of their respective Affiliates or representatives. Objections to such requests must be filed and served on the requesting party and the Debtor no later than thirty (30) days after the date on which the applicable request for payment was served.

15.1.2 Administrative Tax Claims

All requests for payment of Administrative Claims by a governmental unit for taxes (and for interest and/or penalties related to such taxes) for any tax year or period, all or any portion of which occurs or falls within the period from and including the Petition Date through and including the Effective Date, and for which no bar date has otherwise been previously established, must be filed and served on the Reorganized Debtor and any other party specifically requesting a copy in writing on or before the later of: (i) thirty (30) days following the Effective Date; and (ii) one hundred and twenty (120) days following the filing of the tax return for such taxes for such tax year or period with the applicable governmental unit. Any holder of any such Claim that is required to file a request for payment of such taxes and does not file and properly serve such a claim by the applicable bar date shall be forever barred from asserting any such claim against the Debtor, the Reorganized Debtor or the property, regardless of whether any such Claim is deemed to arise prior to, on, or subsequent to the Effective Date. Any interested party desiring to object to an Administrative Claim for taxes must file and serve its objection on counsel to the Debtor, the Plan Administrator and the relevant taxing authority no later than ninety (90) days after the taxing authority files and serves its application.


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15.2 Severability of Plan Provisions

If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court, at the request of the Debtor, shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of the Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms.

15.3 Successors and Assigns

The rights, benefits and obligations of any Person named or referred to in the Plan, including any holder of a Claim, shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such entity.

15.4 Releases by the Debtor

Except as otherwise expressly provided in the Plan or the Confirmation Order, on the Effective Date, for good and valuable consideration, the Debtor and its estate, to the fullest extent permissible under applicable law, shall be deemed to completely and forever release, waive, void, extinguish and discharge unconditionally, each and all of the Released Parties of and from any and all claims, obligations, suits, judgments, damages, debts, rights, remedies, Causes of Action, Avoidance Actions and liabilities of any nature whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are or may be based in whole or part on any act, omission, transaction, event or other circumstance taking place or existing on or prior to the Effective Date (including prior to the Petition Date) in connection with or related to the Debtor, its assets, property and estate, the Chapter 11 Case, the Plan or the Disclosure Statement. For the avoidance of doubt, the foregoing releases described in the Plan shall not waive, affect, limit, restrict or otherwise modify the right of the Debtor and the Reorganized Debtor to object to any Claim not expressly Allowed under the Plan. The Debtor and its estate and any of their respective successors, assigns or representatives shall be permanently, forever and completely stayed, restrained, prohibited, barred and enjoined from pursuing or taking any action on account of the claims or other actions released herein.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval pursuant to Bankruptcy Rule 9019, of the release set forth in Section 15.4 of the Plan, which includes by reference each of the related provisions and definitions contained herein, and further, shall constitute the Bankruptcy Court’s finding that such release is: (i) in exchange for the good and valuable consideration provided by the Released Parties; (ii) a good faith settlement and compromise of the claims released by Section 15.4. of the Plan;


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(iii) in the best interests of the Debtor, its estate and all holders of Claims and Interests; (iv) fair, equitable and reasonable; (v) given and made after due notice and opportunity for a hearing; and (vi) a bar to any Person asserting any claim or Cause of Action released by Section 15.4 of the Plan.

Notwithstanding the foregoing, nothing in Section 15.4 of the Plan shall release any Released Party or other Entity or Person from its respective rights and obligations under the Plan or the Confirmation Order.

15.5 Exculpation

The Debtor, the Plan Administrator, the Agent, the Prepetition Lenders, and each of their respective Professionals SHALL NOT BE LIABLE FOR ANY cause of action arising out of or related to any act or omission in connection with or relating to: (a) the formulation, preparation, solicitation, dissemination, negotiation, or filing of the Plan, the Plan Supplement, the Disclosure Statement, or any contract, instrument, release, or other agreement or document created or entered into in connection with any of the foregoing; (b) the Chapter 11 Case; (c) the pursuit of Confirmation of the Plan; (d) the administration and implementation of the Plan; (e) the distribution of property under the Plan; and/or (f) any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring and/or liquidation of the Debtor; provided, however, that (i) the foregoing shall not apply to claims or causes of action related to any act or omission that is determined in a Final Order to have constituted actual fraud, willful misconduct, or gross negligence and (ii) clauses (d), (e) and (f) shall apply to the post-Effective Date actions by the Plan Administrator only to the extent such actions are consistent with the Plan and Plan Administration Agreement. All holders of Claims and Interests are enjoined from asserting or prosecuting any Claim or cause of action against the Debtor, the Plan Administrator, the Agent, the Prepetition Lenders, or each of their respective Professionals as to any Claim or cause of action as to which the Debtor, the Plan Administrator, the Agent, the Prepetition Lenders, and each of their respective Professionals have been exculpated pursuant to the Plan.

15.6 Indemnification

The Plan Administrator shall not be liable for any act or omission taken or omitted to be taken in his or her capacity as the Plan Administrator, other than acts or omissions resulting from such Person’s willful misconduct, gross negligence or fraud. The Plan Administrator may, in connection with the performance of his or her functions, and in his or her sole absolute discretion, consult with attorneys, accountants and agents, and shall not be liable for any act taken, omitted to be taken, or suffered to be done in accordance with advice or opinions rendered by such professionals. Notwithstanding such authority, the Plan Administrator shall be under no obligation to consult with attorneys, accountants or his or her agents, and his or her determination to not do so should not result in imposition of liability on the Plan Administrator unless such determination is based on willful misconduct, gross negligence or fraud. The Reorganized Debtor shall indemnify and hold harmless the Plan Administrator and his or her agents, representatives, professionals, and employees from and against and in respect to any and all liabilities, losses, damages, claims, costs and expenses, including, but not limited to attorneys’


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fees and costs arising out of or due to their actions or omissions, or consequences of such actions or omissions, with respect to the Reorganized Debtor or the implementation or administration of the Plan; provided, however, that no such indemnification will be made to such Persons for such actions or omissions as a result of willful misconduct, gross negligence or fraud.

15.7 Permanent Injunction

Except as otherwise expressly provided in the Plan and the Confirmation Order, all Persons who have held, hold or may hold Claims against, or Interests in, the Debtor are permanently enjoined, on and after the Effective Date, to the fullest extent permissible under applicable law, as such law may be extended or integrated after the Effective Date, from: (i) commencing or continuing in any manner any action or other proceeding of any kind against the Debtor, the Reorganized Debtor, or their assets with respect to any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas; (ii) the enforcement, attachment, collection, or recovery by any manner or means of judgment, award, decree or order against the Debtor, the Reorganized Debtor, or their assets on account of any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas; (iii) creating, perfecting, or enforcing any encumbrance of any kind against the Debtor, the Reorganized Debtor, or their assets on account of any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas; and (iv) asserting any right of setoff, recoupment or subrogation of any kind against any obligation due from the Debtor, the Reorganized Debtor, or their assets on account of any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas.

15.8 Bankruptcy Rule 3016 Compliance

The Debtor’s compliance with the formal requirements of Bankruptcy Rule 3016(c) shall not constitute an admission that the Plan provides for an injunction against conduct not otherwise enjoined under the Bankruptcy Code.

15.9 Term of Injunctions or Stay

Unless otherwise provided in the Plan or Confirmation Order, all injunctions or stays provided for in the Chapter 11 Case under Bankruptcy Code sections 105 or 362 or otherwise, and in existence on the Confirmation Date (excluding any injunctions or stays contained in the Plan or Confirmation Order), shall remain in full force and effect until the Effective Date. All injunctions or stays contained in the Plan or Confirmation Order shall remain in full force and effect in accordance with their terms.

15.10 Integral to Plan

Each of the injunctions provided in the Plan is an integral part of the Plan and is essential to its implementation. Each of the other Persons protected by the injunctions set forth in the Plan shall have the right to independently seek the enforcement of such injunctions.


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15.11 Preservation of Rights of Action; Settlement

Any and all Causes of Action that the Debtor or its estate may hold against any Person, except for any action or claim released pursuant to Article XV of the Plan, shall automatically vest in the Reorganized Debtor as set forth in Section 4.8 above.

15.12 Binding Effect

The Plan shall be binding upon and inure to the benefit of the Debtor, all present and former holders of Claims against and Interests in the Debtor, its successors and assigns, including, but not limited to, the Debtor, and all other parties-in-interest in the Chapter 11 Case.

15.13 Notices

Any notice, request, or demand required or permitted to be made or provided under the Plan to or upon the Debtor or the Reorganized Debtor shall be: (i) in writing; (ii) served by (a) certified mail, return receipt requested, (b) hand delivery, (c) overnight delivery service or (d) facsimile transmission; and (iii) deemed to have been duly given or made when actually delivered or, in the case of facsimile transmission, when received and telephonically confirmed, addressed as follows:

If to the Debtor:

ECHO ENERGY PARTNERS I, LLC 909 Fannin Street, Suite 4000 Houston, TX 77010 With a copy to (which shall not constitute notice):

William A. (Trey) Wood III Bracewell LLP 711 Louisiana, Suite 2300 Houston, TX 77002 Phone: (713) 223-2300 Fax: (713) 221-1212 If to the Reorganized Debtor:

[This information will be provided in the Plan Supplement.] With a copy to (which shall not constitute notice) [This information will be provided in the Plan Supplement.]


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15.14 Setoffs/Counterclaims

The Debtor may, but shall not be required to, setoff or counterclaim against any Claim and the payments or other distributions to be made pursuant to the Plan in respect of the Claim, claims of any nature whatsoever the estate may have against the holder of the Claim, but neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtor of any claim that the estates may have against the holder. Setoffs or counterclaims arising from events after the Petition Date shall reduce the payouts under any Allowed Claim dollar for dollar. Setoffs or counterclaims arising from pre-petition events shall reduce the amount of the Allowed Claim and, therefore, shall reduce the payout amount proportionally with the reduction in the Allowed Claim. If any counterclaim or setoff asserted by the Debtor exceeds the amount of any Claim, the holder of such Claim shall not be entitled to any distribution under the Plan, and the Debtor will reserve the right to recover any such excess counterclaim or set-off from the holder of the applicable Claim. After the Effective Date, the rights afforded to the Debtor under this paragraph shall apply to the Reorganized Debtor.

In no event shall any holder of Claims or Interests be entitled to setoff any Claim or Interest against any claim, right, or cause of action of the Debtor or the Reorganized Debtor, as applicable, unless such holder has filed a motion with the Bankruptcy Court requesting the authority to perform such setoff on or before the Confirmation Date, and notwithstanding any indication in any Proof of Claim or Interest or otherwise that such holder asserts, has, or intends to preserve any right of setoff pursuant to Bankruptcy Code section 553 or otherwise.

15.15 Recoupment

Any Holder of a Claim or Interest shall not be entitled to recoup any Claim or Interest against any Claim, right, or cause of action of the Debtor or the Reorganized Debtor, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtor on or before the Confirmation Date, notwithstanding any indication in any Proof of Claim or Interest or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.

15.16 Release of Liens

Except as otherwise provided in the Plan or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Debtor’s estate shall be fully released and discharged, and all of the right, title, and interest of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the Debtor and its successors and assigns.


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15.17 Request for Expedited Tax Review

The Reorganized Debtor shall have the right to request an expedited determination under Bankruptcy Code section 505(b) with respect to tax returns filed, or to be filed, for any and all taxable periods ending after the Petition Date through the Effective Date.

15.18 No Admissions

Notwithstanding anything herein to the contrary, nothing in the Plan shall be deemed as an admission by the Debtor with respect to any matter set forth herein, including liability on any Claim.

15.19 Governing Law

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of the State of Texas, without giving effect to the principles of conflicts of law thereof, shall govern the construction and implementation of the Plan and any agreements, documents, and instruments executed in connection with the Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreement shall control) as well as corporate governance matters with respect to the Debtor.

ARTICLE XVI CERTAIN U.S FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

16.1 Certain Material U.S. Federal Income Tax Consequences of the Plan

The following discussion summarizes certain material federal income tax consequences of the implementation of the Plan to certain holders of Allowed Prepetition Lender Secured Claims and Allowed General Unsecured Claims. For the avoidance of doubt, Allowed Claims include any Disputed Claim when such Claim becomes Allowed under the Plan. This summary does not address the U.S. federal income tax consequences to: (i) holders of Claims or Interests who are deemed to have rejected a Plan in accordance with the provisions of section 1126(g) of the Bankruptcy Code; (ii) holders whose Claims are entitled to payment in full in Cash or are otherwise unimpaired under the Plan (i.e., holders of Allowed Priority Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, Allowed Other Secured Claims); or (iii) holders whose Claims are extinguished without distribution in exchange therefore that are not entitled to vote to accept or reject the Plan.

This summary is based on the Internal Revenue Code of 1986, as amended (the “IRC”), existing and proposed Treasury regulations promulgated thereunder (“Treasury Regulations”), judicial decisions, and published administrative rules and pronouncements of the Internal Revenue Service (“IRS”) as in effect on the date hereof, all of which are subject to change, possibly on a retroactive basis. Any such change could significantly affect the U.S. federal income tax consequences described below.

The U.S. federal income tax consequences of the Plan are complex and are subject to significant uncertainties. The Debtor has not requested a ruling from the IRS or an opinion of counsel with respect to any of the tax aspects of the Plan. The discussion below is not binding


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upon the IRS or the courts. Thus, no assurance can be given the IRS would not assert, or that a court would not sustain, a different position than any position discussed in this Disclosure Statement.

The following discussion does not address the U.S. federal income tax consequences to holders of Allowed Prepetition Lender Secured Claims or Allowed General Unsecured Claims that are not U.S. Holders. For purposes of this discussion, a “U.S. Holder” is a holder that is: (i) an individual citizen or resident of the United States for U.S. federal income tax purposes; (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of the source of such income; or (iv) a trust (a) if a court within the United States is able to exercise primary jurisdiction over the trust’s administration and one or more U.S. persons have authority to control all substantial decisions of the trust, or (b) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

This discussion does not purport to address all aspects of U.S. federal income taxation that may be relevant to certain holders of Allowed Prepetition Lender Secured Claims or Allowed General Unsecured Claims in light of their individual circumstances, nor does it purport to address the U.S. federal income tax consequences of the Plan to holders that are subject to special treatment under U.S. federal income tax laws (including, without limitation, non-U.S. Holders, brokers, dealers and traders in securities, banks, mutual funds, insurance companies, financial institutions, thrifts, small business investment companies, regulated investment companies, tax-exempt organizations, certain expatriates, or former long term residents of the United States, pass-through entities or investors in pass-through entities, and those holding Claims as part of a hedge, straddle, conversion, constructive sale or conversion transaction). In addition, this summary does not address state, local or foreign income or other tax consequences of the Plan. This discussion assumes, except where otherwise indicated, that (a) each Allowed Prepetition Lender Secured Claim or Allowed General Unsecured Claim is held as a “capital asset” (generally, property held for investment) within the meaning of section 1221 of the IRC and (b) the debt obligations underlying such Claims properly are treated as debt rather than as equity for U.S. federal income tax purposes.

If a holder is a partnership, other pass-through entity or a disregarded entity for U.S. federal income tax purposes, the tax treatment of a partner in, or owner of, such entity generally will depend upon the status of the partner or owner, and the activities of the entity. Partners or owners of such entities, as well as non-U.S. Holders and other holders that are subject to special treatment under U.S. federal income tax law, should consult their respective tax advisors regarding the U.S. federal income tax consequences of the Plan.

ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE PARTICULAR CIRCUMSTANCES PERTAINING TO A HOLDER OF A CLAIM. EACH HOLDER OF A CLAIM IS URGED TO CONSULT ITS OWN TAX ADVISORS FOR THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES APPLICABLE TO IT UNDER THE PLAN.


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16.2 Consequences to U.S. Holders of Certain Claims

The U.S. federal income tax consequences of the Plan to U.S. Holders of Claims including the character, amount and timing of income, gain or loss recognized as a consequence of the Plan and the distributions provided for by the Plan, generally will depend upon, among other factors: (i) the manner in which a holder acquired the Claim; (ii) the length of time the Claim has been held; (iii) whether the Claim was acquired at a discount; (iv) whether the holder has taken a bad debt deduction in the current or prior years; (v) whether the holder has previously included accrued but unpaid interest with respect to the Claim; (vi) the holder’s method of tax accounting; (vii) whether the holder will realize foreign currency exchange gain or loss with respect to the Claim; (viii) whether the Claim is an installment obligation for U.S. federal income tax purposes; (ix) whether the transaction is treated as a “closed transaction;” and (x) whether the holder also owns Interests. Therefore, U.S. Holders of Allowed Prepetition Lender Secured Claims or Allowed General Unsecured Claims are urged to consult their tax advisors for information that may be relevant to their particular situation and circumstances and the particular tax consequences to such holders as a result thereof.

On the Effective Date, the Agent shall receive, in full and final satisfaction, settlement,

release and discharge of, and in exchange for such Allowed Prepetition Lender Secured Claims, an amount, in Cash, equal to the Cash held by the estate on such date, less the amount of Cash necessary to fund the Wind Down Budget. The Agent shall distribute the foregoing distribution to the Prepetition Lenders in accordance with the Prepetition Credit Agreement. All adequate protection and other payments made to or for the benefit of the Agent and/or the Prepetition Lenders pursuant to the Final Cash Collateral Order shall be retained by the Agent, the Prepetition Lenders, or their advisors, as applicable, without any diminution of the treatment set forth above. In the event the Claim of a holder of an Allowed Prepetition Lenders’ Secured Claim is not completely satisfied by such distribution of proceeds, the deficiency amount will constitute a Prepetition Lender Deficiency Claim and such Prepetition Lender Deficiency Claim will be designated and treated as a General Unsecured Claim under the Plan. Pursuant to the Plan, a holder of an Allowed General Unsecured Claim shall be entitled to its Pro Rata share of the Available Assets as set forth in the Plan and as described immediately below.

Pursuant to the Plan, holders of Allowed General Unsecured Claims will receive their Pro

Rata share of the Available Assets remaining after satisfaction in full of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Claims, Allowed Other Secured Claims, Allowed Prepetition Lenders’ Secured Claims, and the amount of Cash necessary to fund the Wind Down Budget.

16.2.1 Gain or Loss – Generally.

In general, each U.S. Holder of an Allowed Prepetition Lender Secured Claim or Allowed General Unsecured Claim will recognize gain or loss in an amount equal to the difference, between (i) the amount of Cash received in exchange for its Claim (other than any claim for accrued but unpaid interest or imputed interest) and (ii) the U.S. Holder’s adjusted tax basis in such Claim (other than any tax basis attributable to accrued but unpaid interest, which is discussed below). Where gain or loss is recognized by a holder, the character of such gain or loss


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as long-term or short-term capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the tax status of the holder, whether the Claim constitutes a capital asset in the hands of the holder and how long it has been held, whether the Claim was acquired at a market discount, and whether and to what extent the holder previously claimed a bad debt deduction. See the discussions of “accrued interest” and “market discount” below. Holders of Allowed Prepetition Lender Secured Claims and Allowed General Unsecured Claims are urged to consult their tax advisors to determine the character of any gain or loss recognized in connection with the implementation of the Plan.

16.2.2 Accrued Interest.

A portion of the consideration received by the U.S. Holders of Allowed Prepetition Lender Secured Claims or Allowed General Unsecured Claims may be attributable to accrued interest on such Allowed Claims. Such amount may be taxable to that holder as interest income if such accrued interest has not been previously included in such U.S. Holder’s gross income for U.S. federal income tax purposes. Conversely, U.S. Holders of Allowed Claims may be able to recognize a deductible loss to the extent any accrued interest on the Allowed Claims was previously included in such U.S. Holder’s gross income but subsequently is not paid in full.

If the fair market value of the consideration is not sufficient to fully satisfy all principal and interest on Allowed Prepetition Lender Secured Claims or Allowed General Unsecured Claims, the extent to which such consideration will be attributable to accrued interest is unclear. The aggregate consideration to be distributed to holders of Allowed Claims will be allocated first to the principal amount of such Allowed Claims, with any excess allocated to accrued but unpaid interest on such Claims, if any. Certain legislative history indicates that an allocation of consideration as between principal and interest provided in a chapter 11 plan is binding for U.S. federal income tax purposes; however, the applicable Treasury Regulations generally treat payments as allocated first to any accrued but unpaid interest and then as a payment of principal. The IRS could take the position that the consideration received by the U.S. Holder should be allocated other than as provided in the Plan. U.S. Holders of Allowed Claims should consult their own tax advisors regarding the proper allocation of the consideration received by them under the Plan.

16.2.3 Market Discount.

If a holder of an Allowed Claim purchased the underlying debt instrument at a discount, such discount may constitute “market discount” for U.S. federal income tax purposes. Any gain recognized by a holder on the disposition of a debt instrument generally is treated as ordinary income to the extent of any market discount accrued with respect to such instrument by the holder on or prior to the date of such disposition (unless certain elections are made to include the market discount in taxable income over the period that the holder holds the debt instrument).

16.3 Information Reporting and Withholding

All distributions to holders of Allowed Claims under the Plan are subject to any applicable tax withholding, including employment tax withholding. Under U.S. federal income


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tax law, interest, dividends, and other reportable payments may, under certain circumstances, be subject to “backup withholding” at the then applicable withholding rate (currently 28%). Backup withholding generally applies if the holder (a) fails to furnish its social security number or other taxpayer identification number, (b) furnishes an incorrect taxpayer identification number, (c) fails properly to report interest or dividends, or (d) under certain circumstances, fails to provide a certified statement, signed under penalty of perjury, that the tax identification number provided is its correct number and that it is not subject to backup withholding. Backup withholding is not an additional tax but merely an advance payment, which may be refunded to the extent it results in an overpayment of tax. Certain persons are exempt from backup withholding, including, in certain circumstances, corporations and financial institutions.

16.4 Importance of Obtaining Professional Tax Assistance

THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN INCOME TAX CONSEQUENCES OF THE PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A HOLDER’S PARTICULAR CIRCUMSTANCES. ACCORDINGLY, HOLDERS OF CLAIMS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE, AND LOCAL, AND APPLICABLE FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE PLAN.

ARTICLE XVII CONCLUSION AND RECOMMENDATION

The Debtor believes that the Plan is in the best interests of all Holders of Claims, and urge those Holders of Claims entitled to vote to accept the Plan and to evidence such acceptance by returning their Ballots so they will be RECEIVED by the Voting Agent no later than September 25, 2020. If the Plan is not confirmed, or if Holders in those Classes do not vote to accept the Plan, the Holders in those Classes may not receive a distribution.

(Signature Page Immediately Follows)


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Dated: August 14, 2020

ECHO ENERGY PARTNERS I, LLC By: /s/ Gregg Laswell Name: Gregg Laswell Title: Chief Restructuring Officer of Echo

Energy Partners I, LLC


Bracewell Draft 8/12/2020 CONFIDENTAL/WORK PRODUCT

IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS,

HOUSTON DIVISION

In re: ) Chapter 11 ) ECHO ENERGY PARTNERS I, LLC ) Case No. 20-31920 ) Debtor. )

CHAPTER 11 PLAN OF LIQUIDATION FOR ECHO ENERGY PARTNERS I, LLC

DATED AUGUST 14, 2020

BRACEWELL LLP William A. (Trey) Wood III Texas Bar No. 21916050 [email protected] Jason G. Cohen Texas Bar No. 24050435 [email protected] 711 Louisiana, Suite 2300 Houston, Texas 77002 Telephone: (713) 223-2300 Facsimile: (713) 221-1212 COUNSEL FOR THE DEBTOR AND DEBTOR IN POSSESSION

#6209638

Case 20-31920 Document 301-1 Filed in TXSB on 08/14/20 Page 1 of 36

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TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS AND INTERPRETATION .............................................................. 1

1.1 Rules of Interpretation ........................................................................................... 1 1.2 Definitions.............................................................................................................. 1 1.3 Defined Terms ....................................................................................................... 1

ARTICLE II TREATMENT OF UNCLASSIFIED CLAIMS AGAINST THE DEBTOR .......... 8

2.1 Unclassified Claims ............................................................................................... 8 2.2 Treatment of Allowed Administrative Claims ....................................................... 8 2.3 Bar Dates for the Filing and Assertion of Administrative Claims and

Professional Fee Claims ......................................................................................... 9 2.4 Treatment of Allowed Priority Tax Claims ........................................................... 9 2.5 U.S. Trustee Fees ................................................................................................... 9

ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS .......................................... 9

3.1 Creation of Classes ................................................................................................ 9 3.2 Claims May Be in More Than One Class ............................................................ 10

ARTICLE IV IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS THAT ARE AND ARE NOT IMPAIRED UNDER THIS PLAN .................................. 10

4.1 Classes of Claims Not Impaired .......................................................................... 10 4.2 Impaired Classes of Claims and Interests ............................................................ 10 4.3 Impairment Controversies .................................................................................... 10

ARTICLE V TREATMENT OF CLASSES OF CLAIMS AND INTERESTS ......................... 10

5.1 Class 1– Priority Claims ...................................................................................... 10 5.2 Class 2 – Other Secured Claims ........................................................................... 11 5.3 Class 3 – Prepetition Lenders’ Secured Claim .................................................... 11 5.4 Class 4 – General Unsecured Claims ................................................................... 11 5.5 Class 5– Subordinated Claims ............................................................................. 11 5.6 Class 6 – Interests ................................................................................................ 12

ARTICLE VI ACCEPTANCE OR REJECTION OF THIS PLAN ............................................ 12

6.1 Classes and Claims Entitled to Vote .................................................................... 12 6.2 Nonconsensual Confirmation............................................................................... 12

ARTICLE VII MEANS FOR IMPLEMENTATION OF THIS PLAN AND POST EFFECTIVE DATE GOVERNANCE ............................................................................ 12

7.1 Sale of the Acquired Assets ................................................................................. 12 7.2 Continued Existence; Vesting of Assets .............................................................. 12 7.3 The Reorganized Debtor ...................................................................................... 13 7.4 Plan Administrator ............................................................................................... 13


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7.5 Compensation of the Plan Administrator ............................................................. 13 7.6 Funding of the Wind Down Budget ..................................................................... 13 7.7 Dissolution of the Reorganized Debtor................................................................ 14 7.8 Powers and Duties of the Plan Administrator ...................................................... 14 7.9 Cancellation of Interests ...................................................................................... 15 7.10 Termination of Status; General and Limited Partners ......................................... 15 7.11 Resignation/Removal of Plan Administrator ....................................................... 15 7.12 Distribution Procedures ....................................................................................... 15 7.13 Accounting and Reporting ................................................................................... 16 7.14 Preservation of Rights of Action.......................................................................... 16 7.15 Effectuating Documents; Further Reorganization Transactions .......................... 17 7.16 Exemption from Certain Transfer Taxes ............................................................. 17 7.17 Closing of the Chapter 11 Case ........................................................................... 17 7.18 Books and Records. ............................................................................................. 18

ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS GENERALLY ................... 18

8.1 Timing and Delivery of Distributions .................................................................. 18 8.2 Method of Cash Distributions .............................................................................. 18 8.3 Failure to Negotiate Checks ................................................................................. 18 8.4 Compliance with Tax Requirements .................................................................... 18 8.5 De Minimis Distributions .................................................................................... 19 8.6 Distribution Record Date ..................................................................................... 19

ARTICLE IX EXECUTORY CONTRACTS, UNEXPIRED LEASES, AND OTHER AGREEMENTS ............................................................................................................... 19

9.1 Assumption/Rejection .......................................................................................... 19 9.2 Claims Based on Rejection of Executory Contracts and Unexpired Leases ....... 19 9.3 Insurance Policies ................................................................................................ 19 9.4 Reservation of Rights ........................................................................................... 20

ARTICLE X PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND UNLIQUIDATED CLAIMS ........................................................................................... 20

10.1 Objections to Claims ............................................................................................ 20 10.2 Objection Deadline .............................................................................................. 20 10.3 Estimation of Claims............................................................................................ 20 10.4 No Distributions Pending Allowance .................................................................. 21 10.5 Distributions After Allowance ............................................................................. 21 10.6 Reduction of Claims ............................................................................................ 21 10.7 Compliance with Tax Requirements/Allocations ................................................ 21

ARTICLE XI CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN .............................................................................. 22

11.1 Conditions Precedent to Confirmation................................................................. 22 11.2 Conditions Precedent to Effective Date ............................................................... 22 11.3 Substantial Consummation .................................................................................. 23 11.4 Waiver of Conditions ........................................................................................... 23 11.5 Revocation, Withdrawal, or Non-consummation ................................................ 23


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ARTICLE XII AMENDMENTS AND MODIFICATIONS ....................................................... 23

ARTICLE XIII RETENTION OF JURISDICTION ................................................................... 24

ARTICLE XIV COMPROMISES AND SETTLEMENTS ........................................................ 25

ARTICLE XV MISCELLANEOUS PROVISIONS ................................................................... 26

15.1 Administrative Tax Claims .................................................................................. 26 15.2 Severability of Plan Provisions ............................................................................ 26 15.3 Successors and Assigns ........................................................................................ 26 15.4 Releases by the Debtor......................................................................................... 26 15.5 Bankruptcy Rule 3016 Compliance ..................................................................... 27 15.6 Exculpation .......................................................................................................... 27 15.7 Permanent Injunction ........................................................................................... 28 15.8 Term of Injunctions or Stay ................................................................................. 28 15.9 Integral to Plan ..................................................................................................... 28 15.10 Binding Effect ...................................................................................................... 29 15.11 Notices ................................................................................................................. 29 15.12 Setoffs/Counterclaims .......................................................................................... 29 15.13 Recoupment ......................................................................................................... 30 15.14 Release of Liens ................................................................................................... 30 15.15 Request for Expedited Tax Review ..................................................................... 30 15.16 No Admissions ..................................................................................................... 30 15.17 Entire Agreement ................................................................................................. 31 15.18 Governing Law .................................................................................................... 31

ARTICLE XVI CONFIRMATION REQUEST .......................................................................... 32


CHAPTER 11 PLAN OF LIQUIDATION OF ECHO ENERGY PARTNERS I, LLC

ECHO ENERGY PARTNERS I, LLC (the “Debtor”) hereby proposes the following

Chapter 11 Plan of Liquidation (the “Plan”) pursuant to Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”).

ARTICLE I DEFINITIONS AND INTERPRETATION

1.1 Rules of Interpretation

For purposes of this Plan: (a) all Section and Article references in this Plan are to the respective Section or Article of this Plan, as the same may be amended, waived or modified from time to time; (b) the headings in this Plan are for convenience of reference only and shall not limit or otherwise affect the provisions hereof; (c) words denoting the singular number shall include the plural number and vice versa; (d) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; (e) in computing any period of time prescribed or allowed by this Plan, Rule 9006(a) of the Federal Rules of Bankruptcy Procedure shall apply; (f) the words “herein,” “hereof,” “hereto,” “hereunder” and other terms of similar import refer to this Plan as a whole and not to any particular Article, Section, subsection or clause contained in this Plan; (g) any reference herein to a contract, instrument, release or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (h) any reference herein to an existing document or exhibit filed, or to be filed, shall mean such document or exhibit, as it may have been or may be amended, modified or supplemented from time to time; and (i) the words “include,” “includes,” “including,” and similar words or phrases shall be deemed to be followed by the phrase “without limitation.”

1.2 Definitions

Terms and phrases, whether capitalized or not, that are used and not defined in this Plan, but that are defined in the Bankruptcy Code, have the meanings ascribed to them in the Bankruptcy Code. Unless otherwise provided in this Plan, the terms defined in Section 1.3 of this Plan (which appear in this Plan as capitalized terms) have the respective meanings set forth in such section, and such meanings shall be equally applicable to the singular and plural forms of the terms defined, unless the context otherwise requires.

1.3 Defined Terms

1.3.1 “Acquired Assets” means the Assets of the Debtor that were sold to the Purchasers pursuant to the Purchase Agreements and the Sale Orders.

1.3.2 “Administrative Claim” means a Claim for costs and expenses of administration of the Bankruptcy Case entitled to priority under section 503(b) of the Bankruptcy Code including, but not limited to, (i) the actual and necessary costs and expenses incurred after the Petition Date of preserving the Debtor’s estate and operating


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the businesses of the Debtor (such as wages, salaries, reimbursement obligations or commissions for services and payments for goods and other services and leased premises); (ii) Professional Fees; (iii) all fees and charges assessed against the Debtor’s estate pursuant to 28 U.S.C. § 1930; and (iv) the Agent’s Adequate Protection Super-Priority Claim (as defined by the Final Cash Collateral Order).

1.3.3 “Administrative Claims Bar Date” means thirty (30) days after the Effective Date.

1.3.4 “Affiliate” (and, with a correlative meaning “affiliated”) means, with respect to any Person, any Person who would be an “affiliate” pursuant to section 101(2) of the Bankruptcy Code, as well as any direct or indirect subsidiary of such Person, and any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such first Person. As used in this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

1.3.5 “Agent” means Texas Capital Bank, N.A., in its capacity as administrative agent and lender pursuant to the Prepetition Credit Agreement, its successors and assigns.

1.3.6 “Allowed” means

(a) with respect to Claims or Interests, a Claim or Interest (i) which has been scheduled as undisputed, non-contingent and liquidated in the Bankruptcy Schedules (subject to the Debtors’ right to amend such schedules) and as to which no objection or request for estimation has been filed on or before the Claims Objection Deadline or the expiration of such other period fixed by the Bankruptcy Court, (ii) as to which a Proof of Claim has been properly and timely filed and either (x) no objection thereto has been timely filed, or if an objection has been timely filed, the portion of such Claim that is not subject to such objection, or (y) such Claim or Interest has been allowed (but only to the extent allowed) by a Final Order, (iii) which is compromised, settled or otherwise resolved pursuant to the authority granted to the Reorganized Debtor under the Plan or (iv) which has been expressly allowed under the provisions of the Plan;

(b) with respect to any Administrative Claim (i) a Claim (other than a Professional Fee Claim or the Agent’s Adequate Protection Super-Priority Claim (as defined by the Final Cash Collateral Order) that represents an actual and necessary expense of preserving the Debtor’s estate or operating the businesses of the Debtor, to the extent such Claim is determined by the Reorganized Debtor to constitute an Allowed Administrative Claim; (ii) a Claim that is Allowed in whole or in part by a Final Order, and only to the extent that such Allowed portion is determined pursuant to Final Order to constitute a cost or expense of administration under section 503(b) of the Bankruptcy Code; and (iii) a Claim that


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represents a Professional Fee Claim to the extent such Professional Fee Claim is Allowed by an order of the Bankruptcy Court; and

(c) except as otherwise specified in the Plan or a Final Order of the Bankruptcy Court, the amount of an Allowed Claim shall not include interest on such Claim from and after the Petition Date.

1.3.7 “Assets” means all property of the Debtor’s estate as defined in the Bankruptcy Code.

1.3.8 “Available Assets” means (i) all unencumbered Assets and proceeds thereof, (ii) the proceeds from any encumbered Assets in excess of any Allowed Secured Claim against such encumbered Assets, if any, and (iii) the Prepetition Lenders’ Budget Contribution, if any.

1.3.9 “Avoidance Actions” means any and all actions which a trustee, the Debtor, the Reorganized Debtor, or other appropriate party in interest may assert on behalf of the Debtor’s estate under Chapter 5 of the Bankruptcy Code, including actions under one or more provisions of sections 542, 543, 544, 545, 546, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code.

1.3.10 “Bankruptcy Code” means title 11 of the United States Code, section 101, et seq., as now in effect or as hereafter amended.

1.3.11 “Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Texas, Houston Division or, if such court ceases to exercise jurisdiction, the court or adjunct thereof that exercises jurisdiction over the Chapter 11 Case.

1.3.12 “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as amended and promulgated under section 2075 of title 28 of the United States Code, together with the local bankruptcy rules for the Bankruptcy Court as now in effect or as the same may from time to time hereafter be modified or amended.

1.3.13 “Bankruptcy Schedules” means the schedules of assets and liabilities and the statements of financial affairs filed by the Debtor under section 521 of the Bankruptcy Code and Bankruptcy Rule 1007 as such schedules and statements have been or may be supplemented or amended through the Confirmation Date.

1.3.14 “Business Day” means any day which is not a Saturday, a Sunday or a “legal holiday” within the meaning of Bankruptcy Rule 9006(a).

1.3.15 “Cash” means lawful currency of the United States of America.

1.3.16 “Causes of Action” includes without limitation any and all claims, claims as defined in section 101(5) of the Bankruptcy Code, actions, causes of action, choses in action, Avoidance Actions, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances,


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trespasses, damages, judgments, third-party claims, counterclaims, and cross-claims, breach of contract, breach of any special relationship, breach or abuse of any fiduciary duty, concealment, breach of confidentiality, conflicts of interest, conspiracy, improper course of conduct or dealing, debt recharacterization, deceit, deceptive trade practices, defamation, control, disclosure, duress, economic duress, equitable subordination, fraud, fraudulent conveyance, fraudulent inducement, fraudulent transfer, gross negligence, insolvency law violations, interference with contractual and business relationships, misrepresentation, misuse of insider information, negligence, breach of obligation of fair dealing, breach of obligation of good faith and fair dealing, preference, secrecy, securities and antitrust laws violations, substantive consolidation, tying arrangements, unconscionability, usury, violations of statutes and regulations of governmental entities, instrumentalities and agencies, wrongful setoff, of or relating to the Debtor, its Assets or its estate, against any Person, whether based in law or equity, under the Bankruptcy Code and/or other Federal or State law, direct, indirect, derivative, contingent, noncontingent, liquidated, unliquidated, asserted, unasserted, or otherwise.

1.3.17 “Chapter 11 Case” means the bankruptcy case initiated by the Debtor when it filed a voluntary petition under Chapter 11 of the Bankruptcy Code on March 24, 2020, enumerated as Case No. 20-31920.

1.3.18 “Claim” means a claim against the Debtor or its property, as such term is defined in section 101(5) of the Bankruptcy Code.

1.3.19 “Claims Objection Deadline” means the first Business Day that is at least 45 days after the Effective Date, or such later date as may be established by the Bankruptcy Court in accordance with Section 10.2 of this Plan.

1.3.20 “Class” means a category of Claims or Interests, as classified in Article III of this Plan.

1.3.21 “Confirmation” or “Confirmation of this Plan” means the approval of this Plan pursuant to section 1129 of the Bankruptcy Code by the Bankruptcy Court.

1.3.22 “Confirmation Date” means the date on which the clerk of the Bankruptcy Court enters the Confirmation Order on its docket.

1.3.23 “Confirmation Order” means the order of the Bankruptcy Court confirming this Plan pursuant to section 1129 of the Bankruptcy Code, as such order may be amended, modified, or supplemented.

1.3.24 “Debtor” means ECHO ENERGY PARTNERS I, LLC.

1.3.25 “Disclosure Statement” means the Disclosure Statement in support of this Plan dated August 14, 2020 filed concurrently with this Plan, including all exhibits, appendices, schedules, and annexes attached thereto, as submitted by the Debtor pursuant to section 1125 of the Bankruptcy Code and approved by the Bankruptcy Court, as such Disclosure Statement may be amended, supplemented, or modified from time to time.


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1.3.26 “Disputed Claim” means any Claim or any portion thereof which has not become Allowed. For purposes of this Plan, a Claim that has not been Allowed by a Final Order shall be considered a Disputed Claim, whether or not an objection has been or may be timely filed, if: (i) the amount of the Claim specified in the Proof of Claim exceeds the amount of any corresponding Claim scheduled in the Bankruptcy Schedules; (ii) the classification of the Claim specified in the Proof of Claim differs from the classification of any corresponding Claim scheduled in the Bankruptcy Schedules; (iii) any corresponding Claim has been scheduled in the Bankruptcy Schedules as disputed, contingent or unliquidated; (iv) no corresponding Claim has been scheduled in the Bankruptcy Schedules; (v) such Claim is reflected as unliquidated or contingent in the Proof of Claim filed in respect thereof; (vi) the amount, validity, priority or other rights of the Claim are otherwise being contested, or (vii) such Claim was filed after the applicable proof of claim bar date established by the Bankruptcy Court.

1.3.27 “Effective Date” means, and shall occur on the date on which all of the conditions set forth in Section 11.2 have been satisfied.

1.3.28 “Entity” means any corporation, general or limited partnership, limited liability company or partnership, joint venture, association, trust, government agency, body or political subdivision thereof, or unincorporated association, group or body, or other entity, as defined in section 101(15) of the Bankruptcy Code.

1.3.29 “Final Cash Collateral Order” means the Final Order (1) Authorizing Secured Post-Petition Financing; (2) Authorizing the Use of Cash Collateral; (3) Granting Security Interests, Superpriority Claims, and Other Adequate Protection; and (4) Modifying the Automatic Stay [Dkt. No. 129], as extended or modified from time to time.

1.3.30 “Final Order” means a judgment, order, ruling, or other decree issued and entered by the Bankruptcy Court or by any state or other federal court or other tribunal having jurisdiction over the subject matter thereof, which judgment, order, ruling, or other decree has not been reversed, stayed, modified, or amended and as to which: (i) the time to appeal or petition for review, rehearing or certiorari has expired and as to which no appeal or petition for review, rehearing or certiorari is pending; or (ii) any appeal or petition for review, rehearing or certiorari has been finally decided and no further appeal or petition for review, rehearing or certiorari can be taken or granted.

1.3.31 “General Unsecured Claim” means any Claim that is not an Administrative Claim, a Priority Claim, a Priority Tax Claim, Secured Claim (including Other Secured Claims and Prepetition Lenders’ Secured Claims), or an Interest. For the avoidance of doubt, General Unsecured Claims shall include the Prepetition Lenders’ Deficiency Claim.

1.3.32 “Insider” means an “insider” as defined in section 101(31) of the Bankruptcy Code.

1.3.33 “Interest(s)” means all equity interests in the Debtor including any issued and outstanding common or preferred stock, general or limited partnership interests, any


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restricted equity units, calls, rights, puts, awards, commitments, repurchase rights, unvested or unexercised options, warrants, unvested common interests, unvested preferred interests or any other agreements of any character related to any equity interests in the Debtor and/or any other instrument evidencing an ownership interest in the Debtor.

1.3.34 “Lien” means valid and enforceable lien, mortgage, security interest, pledge, charge, encumbrance, or other legally cognizable security device of any kind, which is not subject to avoidance or subordination under the Bankruptcy Code or other applicable law.

1.3.35 “Other Secured Claim” means a Secured Claim, if any, other than the Prepetition Lenders’ Secured Claim.

1.3.36 “Person” means any person, individual, Entity, or other entity or being of whatever kind, whether or not operating or existing for profit, including, but not limited to, any “person” as such term is defined in section 101(41) of the Bankruptcy Code.

1.3.37 “Petition Date” means March 24, 2020.

1.3.38 “Plan” means this Chapter 11 Plan of Liquidation for ECHO ENERGY PARTNERS I, LLC and any amendments, supplements or modifications thereto.

1.3.39 “Plan Administrator” means a Person who shall be named in the Plan Supplement. This Person shall serve as the point person for the Plan Administrator and shall have the authority to make decisions on behalf of the Plan Administrator, subject to any other relevant or required approvals or consents set forth in the Plan.

1.3.40 “Plan Administration Agreement” means the agreement governing the role, rights, and responsibilities of the Plan Administrator. The Plan Administration Agreement will be filed as part of the Plan Supplement.

1.3.41 “Plan Supplement” means such other documents required to be filed pursuant to this Plan, which shall be filed on or before the earlier of (i) three (3) business days before the deadline to vote on the Plan and (ii) fourteen (14) days before the date of the hearing on Confirmation of the Plan.

1.3.42 “Prepetition Credit Agreement” means that certain credit agreement dated January 19, 2018 (as subsequently amended and as may further be amended, restated, supplemented, or otherwise modified from time to time) among the Debtor, Texas Capital Bank, N.A., as Administrative Agent, and certain financial institutions party as lenders thereunder.

1.3.43 “Prepetition Lenders” means the lenders under the Prepetition Credit Agreement, and their respective successors and assigns.

1.3.44 “Prepetition Lenders Adequate Protection Liens” means the Adequate Protection Liens defined in the Final Cash Collateral Order.


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1.3.45 “Prepetition Lenders’ Budget Contribution” means proceeds from the collateral securing the Prepetition Secured Lenders’ Claim in an amount equal to the Wind Down Budget Shortfall.

1.3.46 “Prepetition Lenders’ Deficiency Claim” means the aggregate amount of Claims of the Prepetition Lenders under the Prepetition Credit Agreement less the aggregate amount of the Allowed Prepetition Lenders’ Secured Claims.

1.3.47 “Prepetition Lenders’ Secured Claim” means the Secured Claim of the Prepetition Lenders pursuant to the Prepetition Credit Agreement and Final Cash Collateral Order.

1.3.48 “Priority Claim” means a Claim entitled to priority in payment under section 507(a) of the Bankruptcy Code, excluding any Claim that is an Administrative Claim or a Priority Tax Claim.

1.3.49 “Priority Tax Claim” means any Claim of a governmental unit to the extent that such Claim is entitled to a priority in payment under section 507(a)(8) of the Bankruptcy Code.

1.3.50 “Pro Rata” means, at any time, the proportion that the dollar amount of an Allowed Claim in a particular Class bears to the aggregate dollar amount of all Allowed Claims in such Class.

1.3.51 “Professional” means those Persons retained in this Chapter 11 Case pursuant to an order of the Bankruptcy Court in accordance with section §§ 327 or 328 of the Bankruptcy Code.

1.3.52 “Professional Fee Claim” means a Claim by a Professional for compensation and/or reimbursement of expenses pursuant to sections 328, 330, 331 or 503(b) of the Bankruptcy Code.

1.3.53 “Proof of Claim” means any proof of claim filed with the Bankruptcy Court with respect to the Debtor pursuant to Bankruptcy Rules 3001 or 3002.

1.3.54 “Purchase Agreements” means those certain Asset Purchase Agreements between the Debtor and the Purchaser, dated as of July 1, 2020, and as approved by the Bankruptcy Court pursuant to the Sale Orders.

1.3.55 “Purchaser” means Bricktown Energy, LLC.

1.3.56 “Released Parties” means each of: (i) the Debtor, (ii) the Reorganized Debtor; (iii) the Agent and the Prepetition Lenders; (iv) the Professionals; and (v) in each case of (i) through (iv), their predecessors, successors, assigns, professionals, advisors, accountants, attorneys, investment bankers, and consultants. For the avoidance of doubt and notwithstanding the foregoing, Echo E&P, LLC, [Echo IT], Echo LLC, Echo Investment Partner, LLC, CWC Holdings, LLC, Southern Echo, LLC, Christian Kanady, Patrick Collins, Cartesian Equity Management, LLC, Collins Permian LP, Wallace Family


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Partnership, LP, HPS Investment Partners, LLC and any employees, Governors, or Affiliate of the same (except the Debtor, the Reorganized Debtor, and the Professionals) are expressly excluded from the Released Parties.

1.3.57 “Reorganized Debtor” means ECHO ENERGY PARTNERS I, LLC after the Effective Date.

1.3.58 “Sale Order” means that certain Order (A) Authorizing and Approving the (I) Purchase and Sale Agreement for the Assets; (II) The Sale of the Debtor’s Assets Free and Clear of All Liens, Claims, Encumbrances, and Interests; and (III) the Assumption and Assignment of Certain Contracts and Leases; and (B) Granting Related Relief dated July 2, 2020 [Dkt. No. 268].

1.3.59 “Secured Claim” means a Claim that is: (i) secured as provided by section 506(a) of the Bankruptcy Code, in whole or in part, by a Lien on any assets of the Debtor that is not subject to avoidance or subordination under the Bankruptcy Code or applicable non-bankruptcy law, but only to the extent of the value of the collateral securing such Claim; or (ii) subject to setoff under section 553 of the Bankruptcy Code, but only to the extent of the amount subject to such setoff.

1.3.60 “Wind Down Budget” means the line item budget filed with the Plan Supplement prepared by the Debtor, and subject to Agent approval, estimating the funds necessary to implement and administer this Plan and wind down the Debtor’s affairs, as may be supplemented, amended or otherwise updated or modified from time to time by the Debtor and/or the Plan Administrator, as applicable, and in each case as approved by the Agent.

1.3.61 “Wind Down Budget Shortfall” means the total amount of Cash necessary to fund the Wind Down Budget less the aggregate amount of (i) unencumbered Assets and proceeds thereof and (ii) proceeds from any encumbered Assets in excess of any Allowed Secured Claim against such encumbered Assets (if any).

ARTICLE II TREATMENT OF UNCLASSIFIED CLAIMS AGAINST THE DEBTOR

2.1 Unclassified Claims

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified but shall be treated as set forth in this Article II.

2.2 Treatment of Allowed Administrative Claims

Except to the extent that any holder of an Allowed Administrative Claim agrees to a less favorable treatment, each holder of an Allowed Administrative Claim shall receive from the Reorganized Debtor, in full satisfaction, release and discharge of and in exchange for such Allowed Administrative Claim the amount of such Allowed Administrative Claim, in Cash, on or as soon as practicable after the later of: (i) the Effective Date; (ii) the date that is fourteen (14) days after


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the date such Administrative Claim is Allowed; and (iii) such other date as may be agreed upon in writing by the holder of such Administrative Claim and by the Debtor, or, after the Effective Date, the Reorganized Debtor; provided, however, that Allowed Administrative Claims representing obligations incurred in the ordinary course of business of the Debtor, if any, shall be paid in full in accordance with the terms and conditions of the particular transactions and any applicable agreements.

2.3 Bar Dates for the Filing and Assertion of Administrative Claims and Professional Fee Claims

All requests for payment or any other means of preserving and obtaining payment of Administrative Claims (including Professional Fee Claims) that have not been paid in the ordinary course, released or otherwise settled, must be filed with the Bankruptcy Court and served upon the Reorganized Debtor no later than the Administrative Claims Bar Date. Any request for payment of Administrative Claims that is not filed by the Administrative Claims Bar Date will be forever disallowed and barred, and holders of such Claims will not be able to assert such Claims in any manner against the Debtor, the Debtor’s estate, the Reorganized Debtor or any of their respective Affiliates or representatives. Objections to such requests must be filed and served on the requesting party and the Debtor no later than thirty (30) days after the date on which the applicable request for payment was served.

2.4 Treatment of Allowed Priority Tax Claims

Except to the extent that any holder of an Allowed Priority Tax Claim agrees to less favorable treatment, each holder of an Allowed Priority Tax Claim shall receive from the Reorganized Debtor, in full satisfaction, release and discharge of and in exchange for such Allowed Priority Tax Claim, the amount of such Allowed Priority Tax Claim, in Cash, on or as soon as practicable after the latest of: (i) the Effective Date; (ii) the date that is fourteen (14) days after the date such Claim is Allowed; or (iii) such other date as may be agreed upon in writing by the holder of such Claim and the Debtor, or, after the Effective Date, the Reorganized Debtor.

2.5 U.S. Trustee Fees

All fees payable pursuant to 28 U.S.C. § 1930(a) shall be paid in full in Cash by the Debtor (before the Effective Date) or the Reorganized Debtor (on and after the Effective Date) for each quarter (including any fraction therein) until the Chapter 11 Case is converted, dismissed, or a final decree is issued, whichever occurs first.

ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS

3.1 Creation of Classes

Pursuant to section 1122 of the Bankruptcy Code, this Plan classifies Claims against and Interests in the Debtor in the classes set forth below for all purposes, including voting, confirmation and distribution purposes.


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CLAIMS AGAINST ECHO ENERGY PARTNERS I, LLC Class 1 Priority Claims Class 2 Other Secured Claims Class 3 Prepetition Lenders’ Secured Claims Class 4 General Unsecured Claims Class 5 Subordinated Claims Class 6 Interests

3.2 Claims May Be in More Than One Class

A Claim shall be deemed classified in a particular Class only to the extent that the Claim qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim qualifies within the description of such different Class. A Claim is in a particular Class only to the extent that such Claim is Allowed in that Class and has not been paid or otherwise satisfied prior to the Effective Date.

ARTICLE IV IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS

THAT ARE AND ARE NOT IMPAIRED UNDER THIS PLAN

4.1 Classes of Claims Not Impaired

Classes 1 and 2 are not impaired under this Plan.

4.2 Impaired Classes of Claims and Interests

Classes 3, 4 and 5 are impaired under this Plan.

4.3 Impairment Controversies

If a controversy arises as to whether any Class of Claims or Class of Interests is impaired under this Plan, such Class shall be treated as specified in this Plan unless prior to Confirmation of this Plan the Bankruptcy Court shall determine such controversy differently upon objection of the party challenging the characterization of a particular Class of Claims or Class of Interests under this Plan.

ARTICLE V TREATMENT OF CLASSES OF CLAIMS AND INTERESTS

5.1 Class 1– Priority Claims

Unless the holder of a Priority Claim and the Debtor or, after the Effective Date, the Reorganized Debtor, agree to different treatment, each holder of a Priority Claim shall receive, in full and final satisfaction, settlement, release and discharge of, and in exchange for such Claim, the amount of such Allowed Priority Claim in Cash on or as soon as practicable after the latest of: (i) the Effective Date; (ii) the date that is fourteen (14) days after the date such Claim is Allowed; or (iii) such other date as may be agreed upon in writing by the holder of such Claim.


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5.2 Class 2 – Other Secured Claims

Unless the holder of an Other Secured Claim and the Debtor or, after the Effective Date, the Reorganized Debtor, agree to different treatment, each holder of an Other Secured Claim shall receive, in accordance with the priority of such Other Secured Claim with respect to the collateral securing such claim, in full and final satisfaction, settlement, release and discharge of, and in exchange for such Claim, either: (i) the amount of such Allowed Other Secured Claim in Cash on or as soon as practicable after the latest of (a) the Effective Date, (b) the date that is fourteen (14) days after the date such Claim is Allowed, or (c) such other date as may be agreed upon in writing by the holder of such Claim; or (ii) the return of the applicable collateral in satisfaction of the Allowed amount of such Other Secured Claim; provided, however, that the Allowed amount of an Other Secured Claim shall be limited to the value of the holder’s interest in the collateral securing such claim after taking into consideration other prior liens on the same collateral, if any. Upon satisfaction of such Allowed Claim as set forth herein, any Liens securing such Other Secured Claim shall be deemed released.

5.3 Class 3 – Prepetition Lenders’ Secured Claim

On the Effective Date, to the extent the Prepetition Lenders’ Secured Claim has not been previously satisfied, the Agent shall receive, in full and final satisfaction, settlement, release and discharge of, and in exchange for such Allowed Prepetition Lenders’ Secured Claim, either (i) an amount, in Cash, equal to the proceeds of the collateral securing the Prepetition Secured Lenders’ Claim, as held by the estate on the Effective Date or as received by the Reorganized Debtor after the Effective Date, or (ii) the return of the applicable collateral in satisfaction of the Allowed amount of such Prepetition Lenders’ Secured Claim; provided, however, that in the event there is a Wind Down Budget Shortfall, the amount of Cash distributed on account of the Prepetition Lenders’ Secured Claim shall be decreased by the amount of the Prepetition Lenders’ Budget Contribution.

5.4 Class 4 – General Unsecured Claims

Each holder of an Allowed General Unsecured Claim, including holders of a Prepetition Lenders’ Deficiency Claim, shall receive, in full satisfaction, release and discharge of and in exchange for all of their respective Allowed General Unsecured Claim, on or as soon as reasonably practicable after the Effective Date, their Pro Rata share, in Cash, of the Available Assets remaining after satisfaction in full of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Claims, the Prepetition Lenders’ Secured Claim (each in accordance with this Plan), and payment of, or provision for, all other amounts payable under the Wind Down Budget.

5.5 Class 5– Subordinated Claims

Class 5 shall consist of all Class 5 claims which are determined by the Bankruptcy Court to be subject to equitable subordination. All Class 5 Claims shall be and remain subject to all estate defenses and all Avoidance Claims, including any rights of offset, recoupment, and/or to an affirmative recovery against the Holder of any Class 4 Claim.


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Each holder of an Allowed Subordinated Claim, including shall receive, in full satisfaction, release and discharge of and in exchange for all of their respective Allowed Subordinated Claim, on or as soon as reasonably practicable after the Effective Date, their Pro Rata share, in Cash, of the Available Assets remaining after satisfaction in full of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Claims, the Prepetition Lenders’ Secured Claim (each in accordance with this Plan), Allowed General Unsecured Claim and payment of, or provision for, all other amounts payable under the Wind Down Budget.

5.6 Class 6 – Interests

On the Effective Date, all Interests shall be cancelled and extinguished, and the holders of Interests shall not receive or retain any property or assets on account of their Interests.

ARTICLE VI ACCEPTANCE OR REJECTION OF THIS PLAN

6.1 Classes and Claims Entitled to Vote

Each holder of an Allowed Claim or Interest in an impaired Class (other than a Claim or Interest that will receive no recovery under this Plan) shall be entitled to vote to accept or reject this Plan. Holders of Claims in Classes not impaired under this Plan shall not be entitled to vote to accept or reject this Plan and shall be presumed to have accepted this Plan pursuant to section 1126(f) of the Bankruptcy Code. Classes 1 and 2 are not impaired and hence are presumed to have accepted this Plan. Classes 3, 4, and 5 are impaired and therefore are entitled to vote to accept or reject this Plan. Class 6, which comprises the holders of Interests, will receive no recovery, is impaired and each holder of Interests is deemed to have voted to reject this Plan.

6.2 Nonconsensual Confirmation

If none of the impaired Classes vote to accept the Plan by the requisite statutory majorities, the Debtor reserves the right to amend the Plan. With respect to Class 6 that is deemed to reject the Plan and any other Class of Claims that rejects the Plan, the Debtors shall request that the Bankruptcy Court confirm the Plan pursuant to Bankruptcy Code § 1129(b).

ARTICLE VII MEANS FOR IMPLEMENTATION OF THIS PLAN

AND POST EFFECTIVE DATE GOVERNANCE

7.1 Sale of the Acquired Assets

The Debtor consummated the sale of the Acquired Assets to the Purchasers pursuant to the Purchase Agreements and Sale Orders on July 30, 2020.

7.2 Continued Existence; Vesting of Assets

The Debtor shall continue to exist as the Reorganized Debtor after the Effective Date in accordance with the laws of its respective state or applicable jurisdiction of incorporation, formation, or organization and pursuant to its certificate of incorporation, by-laws, articles of


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formation, operating agreements, and other organizational documents in effect prior to the Effective Date, except to the extent such certificate of incorporation and by-laws are amended under the Plan, or as deemed necessary or appropriate by the Reorganized Debtor to effect the Plan, for the limited purposes of liquidating all of the assets of the bankruptcy estate and making distributions in accordance with the Plan.

Except as otherwise provided herein, on the Effective Date, all property of the Debtor’s estate, including the Assets and any property held or acquired by the Debtor under the Plan or otherwise, will vest in the Reorganized Debtor free and clear of all Claims, Liens, and charges, other encumbrances, Interests, and other equity interests.

7.3 The Reorganized Debtor

The Reorganized Debtor shall retain and have all the rights, powers and duties necessary to carry out its responsibilities under this Plan, and as otherwise provided in the Confirmation Order. The Plan Administrator shall be the exclusive representative of the estate following the Effective Date and his or her rights, duties, and obligations shall be determined by this Plan and the Plan Administration Agreement. In the event of an irreconcilable conflict between the Plan Administration Agreement and the provisions of this Plan, the Plan shall control in all respects.

7.4 Plan Administrator

The Plan Administrator shall be an individual to be named in the Plan Supplement. The Plan Administrator shall retain and have all the rights, powers and duties necessary to carry out its responsibilities under this Plan and the Plan Administration Agreement, and as otherwise provided in the Confirmation Order. The Plan Administrator’s liability may be limited by the Plan Administration Agreement to include limitations of liability for negligence and any actions except for gross negligence, willful misconduct or fraud.

7.5 Compensation of the Plan Administrator

The Plan Administrator shall be compensated solely from the Available Assets as provided for in the Wind-Down Budget and pursuant to the terms of the Plan Administration Agreement. Professionals employed by the Reorganized Debtor shall be entitled to reasonable compensation for services rendered and reimbursement of expenses subject to the Wind Down Budget. The payment of the fees and expenses of the Plan Administrator and the Professionals employed by the Reorganized Debtor shall be made in the ordinary course of business in accordance with the Wind Down Budget and shall not be subject to the approval of the Bankruptcy Court; provided that any disputes related to such fees and expenses shall be brought before the Bankruptcy Court.

7.6 Funding of the Wind Down Budget

The Cash necessary to fund the budgeted expenses in the Wind Down Budget shall be funded from the proceeds of the sale of any unencumbered Assets and, if necessary, from the Prepetition Lenders’ Budget Contribution. Any subsequent recoveries from unencumbered assets of any kind shall be used first to repay the Prepetition Lenders’ Budget Contribution. The Plan


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Administrator may pay Claims and expenses only as provided under this Plan and the Wind Down Budget, provided that the Plan Administrator may amend the Wind Down Budget with the prior written consent of the Agent.

7.7 Dissolution of the Reorganized Debtor

Within the time determined by the Plan Administrator as necessary or appropriate under the circumstances, the Reorganized Debtor shall be dissolved without any further action by its former stockholders, officers, members, or directors. The Plan Administrator may, in his or her discretion, file all necessary certificates of dissolution and take any other actions necessary or appropriate to effect such dissolution under applicable non-bankruptcy law. All applicable regulatory or governmental agencies shall accept any certificates of dissolution or other papers filed by the Plan Administrator on behalf of the Reorganized Debtor and shall take all steps necessary to allow and effect the prompt dissolution as provided herein, without the payment of any fee, tax, or charge and without need for the filing of reports or certificates, except as the Plan Administrator may determine in his or her sole discretion. Upon entry of a final decree in the Bankruptcy Case, if not previously dissolved, the Reorganized Debtor shall be deemed automatically dissolved and wound up without any further action or formality which might otherwise be required under applicable non-bankruptcy laws.

7.8 Powers and Duties of the Plan Administrator

The Plan Administrator shall administer the Assets in accordance with the Plan. The powers of the Plan Administrator shall include any and all powers and authority necessary to implement the Plan including: (i) serving as the sole officer, director and person in control of the Debtor on and after the Effective Date; (ii) liquidating and/or abandoning any of the Assets; (iii) investing Cash; (iv) taking all steps to execute all instruments and documents necessary to effectuate distributions to holders of Allowed Claims in accordance with the Plan including, without limitation, the establishment of any reserves that the Reorganized Debtor, in consultation with the Agent, deems necessary and/or appropriate; (v) paying Allowed Administrative Claims (including Allowed Professional Fee Claims), Allowed Priority Tax Claims, Allowed Priority Claims, Allowed Other Secured Claims, Allowed Prepetition Secured Lenders’ Claims and Allowed General Unsecured Claims in accordance with the Plan; (vi) employing, retaining, terminating or replacing professionals to represent it with respect to its responsibilities or otherwise effectuating the Plan; (vii) paying any and all reasonable fees and expenses of the Reorganized Debtor (if any) and any professionals employed by the Reorganized Debtor without approval of the Bankruptcy Court; (viii) administering and paying taxes, including filing tax returns; (ix) requesting an expedited determination of any unpaid tax liability of the Debtor or Reorganized Debtor under Bankruptcy Code § 505; (x) representing the interests of the Debtor or its post-confirmation estate before any taxing authority in all matters, including any action, suit, proceeding or audit; (xi) taking all steps reasonably necessary and practicable to terminate the corporate existence of the Debtor in accordance with the Plan; (xii) having the sole authority to prosecute any of the Causes of Action and having the authority to compromise, settle, resolve, discontinue, abandon or dismiss all such actions without approval of the Bankruptcy Court, subject to the consent of the Agent; provided that, in the event the Agent does not consent, the Plan Administrator may seek Bankruptcy Court approval of the proposed compromise, settlement, resolution, discontinuance, abandonment, or dismissal of the subject Cause of Action; and


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(xiii) exercising such other powers as may be vested in it pursuant to order of the Bankruptcy Court, the Plan, or as it reasonably deems to be necessary and proper to carry out the provisions of the Plan.

7.9 Cancellation of Interests

On the Effective Date, all Interests in the Debtor shall be terminated and extinguished and any certificates or other documents that previously evidenced ownership of those Interests shall be deemed canceled (all without further action by any Person or the Bankruptcy Court) and shall be null and void and such certificates and documents shall evidence no rights or Interests in the Debtor.

7.10 Termination of Status; General and Limited Partners

From and after the Effective Date, the Reorganized Debtor shall not be required to file any document, or take any other action, or obtain any approval from the Debtor’s officers, directors and managers, to withdraw its business operations from any states in which the Debtor previously conducted its business operations.

On the Effective Date: (i) the positions of the current officers, directors and managers (such persons and the corporate directors collectively, the “Governors”) of the Debtor shall be eliminated, and each Governor shall be terminated (without the necessity of further action); and (ii) to the fullest extent permitted by applicable law, the rights, powers, and duties of the Governors of the Debtor shall vest in the Plan Administrator and the Plan Administrator shall be the sole Governor of the Debtor.

7.11 Resignation/Removal of Plan Administrator

The Plan Administrator may resign or be removed upon application to the Bankruptcy Court. Any successor Plan Administrator shall be selected by the Agent and notice of the successor Plan Administrator shall be filed with file with the Bankruptcy Court.

7.12 Distribution Procedures

Any payments or distributions to be made by the Reorganized Debtor to holders of Claims as required by the Plan shall be made only to the holders of Allowed Claims. Any payments or distributions to be made by the Reorganized Debtor pursuant to the Plan shall be made on or about the Effective Date of such Plan, or as soon thereafter as practicable, except as otherwise provided for in the Plan. Any payment, delivery or distribution by the Reorganized Debtor pursuant to the Plan, to the extent delivered by the United States mail, shall be deemed made when deposited by the Reorganized Debtor into the United States mail. Distributions or deliveries required to be made by the Plan on a particular date shall be deemed to have been made on such date if actually made on such date or as soon thereafter as practicable taking into account the need to establish reserves and account for Disputed Claims. No payments or other distributions of property shall be made on account of any Claim or portion thereof unless and until such Claim or portion thereof is Allowed.

The Reorganized Debtor may establish reserves for Disputed Claims from amounts that would otherwise be available to pay such Disputed Claims in an amount equal to the aggregate


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distributions which would be made on account of such Disputed Claims if they were Allowed or in such other amount as may be determined by the Bankruptcy Court. The Reorganized Debtor may defer or delay distributions to ensure an equitable and ratable distribution to holders of Allowed Claims, in accordance with the terms of the Plan. The Reorganized Debtor will make no distributions upon a Claim held by a party against whom the Reorganized Debtor asserts any Avoidance Action until resolution of the Avoidance Action by settlement or judgment or as otherwise provided by Bankruptcy Court order.

The Reorganized Debtor or Plan Administrator, as applicable, shall make interim distributions no less than once per month, except as may otherwise be agreed by the Agent; provided, however, if any interim distribution would be less than $10,000, the Reorganized Debtor or Plan Administrator, as applicable, shall not be required to make such interim distribution until it accumulates to an amount equal to or greater than a total of $10,000. Pursuant to such interim distributions, the Reorganized Debtor or Plan Administrator shall distribute all Cash then held in the estate other than Cash reserved (i) to fund the Wind Down Budget pursuant to Section 7.6 hereof and (ii) on account of Disputed Claims pursuant to the immediately preceding paragraph.

7.13 Accounting and Reporting

The Plan Administrator shall maintain an accounting of receipts and disbursements with respect to the Reorganized Debtor, which shall be open to inspection and review by the Bankruptcy Court and any holder of an Allowed Claim against the Reorganized Debtor, upon reasonable notice to the Plan Administrator. After the Effective Date, the Plan Administrator shall continue the reporting obligations for the Estate of the Reorganized Debtor pursuant to U.S. Trustee guidelines until the Bankruptcy Court enters a final decree closing the Chapter 11 Case of the Reorganized Debtor. After the Effective Date, on the 20th day following the end of the calendar quarter, the Plan Administrator shall provide the Agent with an accounting of all receipts and disbursements with respect to the Reorganized Debtor.

7.14 Preservation of Rights of Action

Any and all Causes of Action that the Debtor or its estate may hold against any Person, other than any action or claim released pursuant to Article XV of the Plan, shall automatically vest in the Reorganized Debtor as Available Assets. The Reorganized Debtor, and only the Reorganized Debtor, through its authorized agents and representatives may pursue and enforce any and all such Causes of Action. The Reorganized Debtor shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing subject only to the prior written consent of the Agent and without further notice to or action, order, or approval of the Bankruptcy Court. If there is disagreement between the Reorganized Debtor and the Agent, then the Reorganized Debtor will seek approval of the Bankruptcy Court before taking such action.

Any and all claims, causes of action, defenses, and counterclaims of or accruing to the Debtor or its estate related to the Causes of Action shall be transferred to the Reorganized Debtor, whether or not litigation relating thereto is pending on the Effective Date, and whether or not any such rights, claims, causes of action, defenses and counterclaims have been listed or referred to in


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this Plan, the Bankruptcy Schedules or any other document filed with the Bankruptcy Court. The Reorganized Debtor does not waive, relinquish, or abandon (nor shall it be estopped or otherwise precluded from asserting) any right, claim, cause of action, defense, or counterclaim that constitutes a Cause of Action (i) whether or not such right, claim, cause of action, defense, or counterclaim has been listed or referred to in this Plan, the Bankruptcy Schedules or any other document filed with the Bankruptcy Court; (ii) whether or not such right, claim, cause of action, defense, or counterclaim is currently known to the Debtor; and (iii) whether or not a defendant in any litigation relating to such right, claim, cause of action, defense or counterclaim filed a Proof of Claim in the Chapter 11 Case, filed a notice of appearance or any other pleading or notice in the Chapter 11 Case, voted for or against this Plan, or received or retained any consideration under this Plan. Specifically, additional Causes of Action may be discovered and pursued against the Insiders and Affiliates and additional Causes of Action may also be discovered and pursued against other Insiders and Affiliates and/or subsequent transferees of such Insiders and Affiliates.

Without in any manner limiting the generality of the foregoing, notwithstanding any otherwise applicable principle of law or equity, without limitation, any principles of judicial estoppel, res judicata, collateral estoppel, issue preclusion, or any similar doctrine, the failure to list, disclose, describe, identify, or refer to a right, claim, cause of action, defense, or counterclaim, or potential right, claim, cause of action, defense, or counterclaim, in this Plan, the Bankruptcy Schedules, or any other document filed with the Bankruptcy Court shall in no manner waive, eliminate, modify, release, or alter the Reorganized Debtor’s right to commence, prosecute, defend against, settle, and realize upon any rights, claims, causes of action, defenses, or counterclaims that is a Cause of Action as of the Effective Date.

7.15 Effectuating Documents; Further Reorganization Transactions

The Reorganized Debtor, shall be authorized to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other agreements or documents, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The Reorganized Debtor shall be authorized to certify or attest to any of the foregoing actions.

7.16 Exemption from Certain Transfer Taxes

Pursuant to Bankruptcy Code section 1146(a), the issuance, transfer, or exchange of a security, or the making of delivery of an instrument of transfer, provided under the Plan, from the Debtor to the Reorganized Debtor or any other Person pursuant to the Plan may not be taxed under any law imposing a stamp tax or similar tax, and the Confirmation Order shall direct the appropriate state or local governmental officials or agents to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.

7.17 Closing of the Chapter 11 Case

The Reorganized Debtor acting through Plan Administrator, in consultation with the Agent, shall have authority to seek to close the Chapter 11 Case in accordance with the Bankruptcy Code and the Bankruptcy Rules.


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7.18 Books and Records.

Any attorney, accountant, or other person including Echo E&P, LLC and Echo Energy, LLC, that holds the Debtor’s recorded information, including books, documents, records, and papers, relating to the Debtor’s property or financial affairs, shall turn over or disclose such recorded information to the Debtor and Plan Administrator upon written notice by the Plan Administrator. Books, records and information shall include data and information ordinary and customarily available pursuant to Section 542 of the Bankruptcy Code or pursuant to any contract or right held by the Debtor.

ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS GENERALLY

8.1 Timing and Delivery of Distributions

The Plan and Confirmation Order shall govern distributions and shall include and be consistent with the terms of the other sections of this ARTICLE VIII and other relevant provisions of the Plan, including, without limitation, ARTICLE III of the Plan.

8.2 Method of Cash Distributions

Any Cash payment to be made pursuant to the Plan may be made by Cash, draft, check, wire transfer, or as otherwise required or provided in any relevant agreement or applicable law at the option of and in the sole discretion of the Reorganized Debtor.

8.3 Failure to Negotiate Checks

Checks issued in respect of distributions under the Plan shall be null and void if not negotiated within sixty (60) days after the date of issuance. The Reorganized Debtor shall hold any amounts returned in respect of such non-negotiated checks. The holder of an Allowed Claim with respect to which such check originally was issued shall make requests for reissuance for any such check directly to the Reorganized Debtor. All amounts represented by any voided check will be held until the later of one (1) year after (x) the Effective Date or (y) the date that a particular Claim is Allowed, and all requests for reissuance by the holder of the Allowed Claim in respect of a voided check are required to be made prior to such date. Thereafter, all such amounts shall be deemed to be “unclaimed property,” and all Claims in respect of void checks and the underlying distributions shall be forever barred, estopped and enjoined from assertion in any manner against the Reorganized Debtor. All “unclaimed property” (including any Cash designated to fund the Wind Down Budget that is not spent upon the conclusion of the Plan Administrator’s duties) shall be used first to repay the Prepetition Lenders’ Budget Contribution and remaining amounts, if any, become property of the Reorganized Debtor and shall be distributed by the Plan Administrator to the remaining holders of Allowed Claims in accordance with this Plan.

8.4 Compliance with Tax Requirements

The Reorganized Debtor shall be responsible for filing any tax information or tax document on behalf of the Debtor.


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8.5 De Minimis Distributions

No Cash payment of less than five ($5.00) dollars shall be made to the holder of any Claim on account of its Allowed Claim.

8.6 Distribution Record Date

On the Confirmation Date (the “Distribution Record Date”), all transfer ledgers, transfer books, registers and any other records maintained by the designated transfer agents with respect to ownership of any Claims will be closed and, for purposes of the Plan, there shall be no further changes in the record holders of such Claims. The Reorganized Debtor shall have no obligation to recognize the transfer of any Claims occurring after the Distribution Record Date, and will be entitled for all purposes to recognize and deal only with the Holder of any Claim as of the close of business on the Distribution Record Date, as reflected on such ledgers, books, registers or records.

ARTICLE IX EXECUTORY CONTRACTS, UNEXPIRED LEASES, AND OTHER AGREEMENTS

9.1 Assumption/Rejection

Except as otherwise provided in the Confirmation Order, on the Effective Date, all of the Debtor’s executory contracts and unexpired leases not previously assumed will be rejected.

9.2 Claims Based on Rejection of Executory Contracts and Unexpired Leases

Unless otherwise provided by a Bankruptcy Court order, any Proofs of Claim asserting Claims arising from the rejection of the Debtor’s executory contracts and unexpired leases pursuant to the Plan or otherwise must be filed no later than thirty (30) days after the later of the Effective Date or the effective date of rejection. Any Proofs of Claim arising from the rejection of the Debtor’s executory contracts or unexpired leases that are not timely filed shall be disallowed automatically, forever barred from assertion, and shall not be enforceable against any Debtor or the Reorganized Debtor without the need for any objection by any Person or further notice to or action, order, or approval of the Bankruptcy Court, and any Claim arising out of the rejection of the executory contract or unexpired lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the Bankruptcy Schedules or a Proof of Claim to the contrary. All Allowed Claims arising from the rejection of the Debtor’s executory contracts and unexpired leases shall be classified as General Unsecured Claims and shall be treated in accordance with the particular provisions of the Plan.

9.3 Insurance Policies

Notwithstanding anything to the contrary herein, all insurance policies to which the Debtor has any rights as of the date of the Confirmation Order shall be deemed and treated as executory contracts assumed and assigned to the Reorganized Debtor to the extent such policies are determined to be executory contracts. Nothing therein shall extend to any well and property operations insurance coverage.


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9.4 Reservation of Rights

Nothing contained in the Plan shall constitute an admission by the Debtor that any contract or lease is in fact an executory contract or unexpired lease or that the Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Reorganized Debtor shall have thirty (30) days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

ARTICLE X PROCEDURES FOR RESOLVING DISPUTED,

CONTINGENT, AND UNLIQUIDATED CLAIMS

10.1 Objections to Claims

After the Effective Date, the Reorganized Debtor, in consultation with the Agent, shall have the exclusive authority to file objections to all Claims, and the exclusive authority to settle, compromise, or litigate to judgment any objections to Claims that he or she files. The Reorganized Debtor, in consultation with the Agent, may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. If there is disagreement between the Reorganized Debtor and the Agent, the Reorganized Debtor will seek approval of the Bankruptcy Court before taking such action.

10.2 Objection Deadline

As soon as practicable, but no later than the Claims Objection Deadline, the Reorganized Debtor may file objections to Claims with the Bankruptcy Court and serve such objections on the holders of the Claims to which such objections are made. Nothing contained herein, however, shall limit the right of the Reorganized Debtor to object to Claims, if any, filed or amended after the Claims Objection Deadline. The Claims Objection Deadline may be extended by the Bankruptcy Court upon motion by the Debtor or Reorganized Debtor.

For the avoidance of doubt, no Claim is or shall be deemed Allowed except the Agent’s Claim, until the later of the Claims Objection Deadline or the expiration of some other applicable period of limitation fixed by the Bankruptcy Code, Bankruptcy Rules, or Bankruptcy Court, unless otherwise ordered by a Final Order of the Bankruptcy Court or Allowed pursuant to this Plan.

10.3 Estimation of Claims

The Reorganized Debtor may at any time request that the Bankruptcy Court estimate any contingent or unliquidated Claim pursuant to Bankruptcy Code section 502(c), regardless of whether the Reorganized Debtor or the Debtor has previously objected to such Claim or whether the Bankruptcy Court has ruled on any objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal related to any such objection. In the event the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as


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determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the Reorganized Debtor may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the aforementioned objection, estimation and resolution procedures are cumulative and are not necessarily exclusive of one another.

10.4 No Distributions Pending Allowance

Notwithstanding any provision in the Plan to the contrary, no distributions, partial or otherwise, shall be made with respect to a Disputed Claim until such Claim becomes an Allowed Claim. Subject to the provisions of the Plan, after a Disputed Claim becomes an Allowed Claim, the holder of such an Allowed Claim will receive all distributions to which such holder is then entitled under the Plan on the next scheduled distribution date or as the Reorganized Debtor otherwise determines in its reasonable discretion. No post-Effective Date interest shall be paid on distributions under this section of the Plan. If the holder of a Claim incorporates more than one Claim in a Proof of Claim then: (i) such Claims will be considered one Claim for purposes of this Plan; and (ii) no such Claim will be bifurcated into an Allowed portion and a Disputed portion.

10.5 Distributions After Allowance

As soon as reasonably practicable after the date that an order or judgment of the Bankruptcy Court allowing all or part of any General Unsecured Claim that is a Disputed Claim becomes a Final Order, the Reorganized Debtor shall distribute to the Holder of such Claim the distribution (if any) that would have been made to such Holder had such Allowed General Unsecured Claim been Allowed when distributions were made. After a Disputed Claim becomes an Allowed General Unsecured Claim or is otherwise resolved, any excess Cash or other property that was reserved on account of such Disputed Claim, if any, shall become property of the Reorganized Debtor for the benefit of Allowed General Unsecured Claims.

10.6 Reduction of Claims

Notwithstanding the contents of the Bankruptcy Schedules, Claims listed therein as undisputed, liquidated and not contingent shall be reduced by the amount, if any, that was paid by the Debtor prior to the Effective Date, including pursuant to orders of the Bankruptcy Court. To the extent such payments are not reflected in the Bankruptcy Schedules, such Bankruptcy Schedules will be deemed amended and reduced to reflect that such payments were made. Nothing in this Plan shall preclude the Reorganized Debtor from paying Claims that the Debtor was authorized to pay pursuant to any Final Order entered by the Bankruptcy Court prior to the Effective Date.

10.7 Compliance with Tax Requirements/Allocations

In connection with this Plan, to the extent applicable, the Reorganized Debtor shall comply with all tax withholding and reporting requirements imposed on it by any governmental unit, and all distributions thereto shall be subject to such withholding and reporting requirements. Any amounts so withheld from any payment made under this Plan shall be deemed paid to the holder of the Allowed Claim subject to withholding. The Reorganized Debtor may require that each holder complete the appropriate Internal Revenue Service Form W-8BEN, Internal Revenue Service Form W-8BEN-E, or Internal Revenue Service Form W-9, or successor form as


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applicable, to each holder provided, however, that the sole remedy in the event a holder fails to comply with such a request within six months shall be to make a proper withholding of tax to the extent required by applicable law. Notwithstanding any provision in this Plan to the contrary, the Reorganized Debtor shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of a distribution to be made under this Plan to generate sufficient funds to pay applicable withholding taxes with respect to such distribution, withholding distributions pending receipt of information necessary to facilitate such distribution, or establishing any other mechanisms it believes are reasonable and appropriate. If the Reorganized Debtor fails to withhold with respect to any such holder’s distribution, and is later liable for the amount of such withholding, the holder shall reimburse the Reorganized Debtor. The Reorganized Debtor reserves the right to allocate all distributions made under this Plan in compliance with all applicable wage garnishments, alimony, child support, and other spousal awards, liens and encumbrances. Unless otherwise required by law or provided in this Plan, distributions in respect of Allowed Claims shall be allocated first to the principal amount (as determined for U.S. federal income tax purposes) of such Allowed Claims, and then, to the extent the consideration exceeds the principal amount of such Allowed Claims, to any portion of such Allowed Claims for accrued but unpaid interest.

The Reorganized Debtor will in good faith value the Reorganized Debtor’s Available Assets. The Reorganized Debtor shall make the respective values available from time to time (including at the request of the Agent), to the extent relevant, and such values shall be used consistently by the Reorganized Debtor for all U.S. federal income tax purposes.

ARTICLE XI CONDITIONS PRECEDENT TO CONFIRMATION

AND CONSUMMATION OF THE PLAN

11.1 Conditions Precedent to Confirmation

The following are conditions precedent to the occurrence of Confirmation:

11.1.1 The Bankruptcy Court shall have entered an order, in a form reasonably acceptable to the Debtor and the Agent, approving the adequacy of the Disclosure Statement; and

11.1.2 The Confirmation Order approving and confirming the Plan, as such Plan may have been modified, amended or supplemented, shall have been entered in form and substance reasonably acceptable to the Debtor and the Agent.

11.2 Conditions Precedent to Effective Date

The following are conditions precedent to the occurrence of the Effective Date, each of which must be satisfied or waived in accordance with Section 11.4 below:

11.2.1 The Confirmation Order shall have been entered in form and substance reasonably acceptable to the Debtor and the Agent and such order shall have become a Final Order.


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11.2.2 Cash shall have been reserved for all amounts payable under the Wind Down Budget;

11.2.3 No stay of the Confirmation Order is in effect; and

11.2.4 All documents, instruments and agreements, in form and substance reasonably satisfactory to the Debtor and the Agent, provided for or necessary to implement the Plan have been executed and delivered.

11.3 Substantial Consummation

On the Effective Date, the Plan shall be deemed to be substantially consummated under Bankruptcy Code section 1101(2).

11.4 Waiver of Conditions

Each of the conditions set forth in Section 11.2 hereof may be waived in whole or in part by the Debtor and the Agent. The failure to satisfy or waive any condition to the Effective Date may be asserted by the Debtor and the Agent regardless of the circumstances giving rise to the failure of such condition to be satisfied.

11.5 Revocation, Withdrawal, or Non-consummation

The Debtor reserves the right to revoke or withdraw the Plan at any time prior to the Confirmation Date and to file subsequent plans. If the Debtor revokes or withdraws the Plan, or if Confirmation or substantial consummation of the Plan does not occur, then: (i) the Plan shall be null and void in all respects; (ii) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain of any Claim or Class of Claims) unless otherwise agreed to by the Debtor and any counterparty to such settlement or compromise, and any document or agreement executed pursuant to the Plan shall be deemed null and void; and (iii) nothing contained in the Plan, and no acts taken in preparation for Consummation of the Plan, shall (a) constitute or be deemed to constitute a waiver or release of any Claims by or against, or any Interests in, the Debtor or any other Person, (b) prejudice in any manner the rights of the Debtor or any Person in any further proceedings involving the Debtor, or (c) constitute an admission of any sort by the Debtor or any other Person.

ARTICLE XII AMENDMENTS AND MODIFICATIONS

The Debtor may alter, amend, or modify the Plan under Bankruptcy Code section 1127(a) at any time prior to the Confirmation Date with the reasonable consent of the Agent. After the Confirmation Date and prior to “substantial consummation” of the Plan, as defined in Bankruptcy Code section 1101(2), the Reorganized Debtor acting through the Plan Administrator may, under Bankruptcy Code section 1127(b), institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in the Plan, the Disclosure Statement or the Confirmation Order, and such matters as may be necessary to carry out the purposes and effects of the Plan, so long as such proceedings do not materially adversely affect the treatment of holders


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of Claims or Interests under the Plan; provided, however, that prior notice of such proceedings shall be served in accordance with the Bankruptcy Rules or order of the Bankruptcy Court.

ARTICLE XIII RETENTION OF JURISDICTION

Under Bankruptcy Code sections 105(a) and 1142, and notwithstanding entry of the Confirmation Order and occurrence of the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters arising out of, or related to, the Chapter 11 Case and the Plan to the fullest extent permitted by law, including, among other things, jurisdiction to:

(A) Allow, disallow, determine, liquidate, classify, estimate or establish the priority or Secured or unsecured status of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any objections to the Secured or unsecured status, priority, amount or allowance of Claims or Interests;

(B) Hear and determine all applications for compensation and reimbursement of expenses of Professionals under Bankruptcy Code sections 327, 328, 330, 331, 503(b), or 1129(a)(4);

(C) Hear and determine all matters with respect to the assumption or rejection of any executory contract or unexpired lease to which the Debtor is a party or with respect to which the Debtor may be liable, including, if necessary, the nature or amount of any required cure or the liquidating of any claims arising therefrom;

(D) Hear and determine any and all adversary proceedings, motions, applications, and contested or litigated matters arising out of, under, or related to, the Chapter 11 Case, including, but not limited to all Avoidance Actions;

(E) Enter and enforce such orders as may be necessary or appropriate to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement or the Confirmation Order;

(F) Hear and determine disputes arising in connection with the interpretation, implementation, Consummation, or enforcement of the Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan;

(G) Consider any modifications of the Plan, cure any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

(H) Issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Person with implementation, Consummation, or enforcement of the Plan or the Confirmation Order;


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(I) Enter and implement such orders as may be necessary or appropriate if the Confirmation Order is for any reason reversed, stayed, revoked, modified, or vacated;

(J) Hear and determine any matters arising in connection with or relating to the Plan, the Disclosure Statement, the Confirmation Order or any other contract, instrument, release, or other agreement or document created in connection with the Plan, the Disclosure Statement or the Confirmation Order;

(K) Enforce all orders, judgments, injunctions, releases, exculpations, indemnifications and rulings entered in connection with the Chapter 11 Case or pursuant to the Plan;

(L) Recover all assets of the Debtor and property of the estate, wherever located;

(M) Hear and determine matters concerning state, local, and federal taxes in accordance with Bankruptcy Code sections 346, 505, and 1146;

(N) Hear and determine all disputes involving any releases granted in the Plan;

(O) Hear and determine such other matters as may be provided in the Confirmation Order or as may be authorized under, or not inconsistent with, provisions of the Bankruptcy Code;

(P) Enter an order or final decree concluding or closing the Chapter 11 Case; and

(Q) Enforce all orders previously entered by the Bankruptcy Court.

ARTICLE XIV COMPROMISES AND SETTLEMENTS

Pursuant to Bankruptcy Code section 363 and Bankruptcy Rule 9019, and in consideration for the classification, distribution and other benefits provided under the Plan, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims, Interests and controversies resolved pursuant to the Plan, including, without limitation, all Claims arising prior to the Petition Date, whether known or unknown, foreseen or unforeseen, asserted or unasserted, arising out of, relating to or in connection with the business or affairs of, or transactions with, the Debtor. The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of each of the foregoing compromises or settlements, and all other compromises and settlements provided for in the Plan, and the Bankruptcy Court’s findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtor, the estate, holders of Claims and other parties in interest, and are fair, equitable and within the range of reasonableness.


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ARTICLE XV MISCELLANEOUS PROVISIONS

15.1 Administrative Tax Claims

All requests for payment of Administrative Claims by a governmental unit for taxes (and for interest and/or penalties related to such taxes) for any tax year or period, all or any portion of which occurs or falls within the period from and including the Petition Date through and including the Effective Date, and for which no bar date has otherwise been previously established, must be filed and served on the Reorganized Debtor and any other party specifically requesting a copy in writing on or before the later of: (i) thirty (30) days following the Effective Date; and (ii) one hundred and twenty (120) days following the filing of the tax return for such taxes for such tax year or period with the applicable governmental unit. Any holder of any such Claim that is required to file a request for payment of such taxes and does not file and properly serve such a claim by the applicable bar date shall be forever barred from asserting any such claim against the Debtor, the Reorganized Debtor or the property, regardless of whether any such Claim is deemed to arise prior to, on, or subsequent to the Effective Date. Any interested party desiring to object to an Administrative Expense Claim for taxes must file and serve its objection on counsel to the Debtor, the Reorganized Debtor and the relevant taxing authority no later than thirty (30) days after the taxing authority files and serves its application.

15.2 Severability of Plan Provisions

If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court, at the request of the Debtor, shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of the Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms.

15.3 Successors and Assigns

The rights, benefits and obligations of any Person named or referred to in the Plan, including any holder of a Claim, shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such entity.

15.4 Releases by the Debtor

Except as otherwise expressly provided in the Plan or the Confirmation Order, on the Effective Date, for good and valuable consideration, the Debtor and its estate, to the fullest extent permissible under applicable law, shall be deemed to completely and forever release, waive, void, extinguish and discharge unconditionally, each and all of the Released Parties of and from any and all claims, obligations, suits, judgments, damages, debts, rights,


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remedies, Causes of Action, Avoidance Actions and liabilities of any nature whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are or may be based in whole or part on any act, omission, transaction, event or other circumstance taking place or existing on or prior to the Effective Date (including prior to the Petition Date) in connection with or related to the Debtor, its assets, property and estate, the Chapter 11 Case, the Plan or the Disclosure Statement. For the avoidance of doubt, the foregoing releases described in this Plan shall not waive, affect, limit, restrict or otherwise modify the right of the Debtor and the Reorganized Debtor to object to any Claim not expressly Allowed under the Plan. The Debtor and its estate and any of their respective successors, assigns or representatives shall be permanently, forever and completely stayed, restrained, prohibited, barred and enjoined from pursuing or taking any action on account of the claims or other actions released herein.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval pursuant to Bankruptcy Rule 9019, of the release set forth in this Section 15.4, which includes by reference each of the related provisions and definitions contained herein, and further, shall constitute the Bankruptcy Court’s finding that such release is: (i) in exchange for the good and valuable consideration provided by the Released Parties; (ii) a good faith settlement and compromise of the claims released by this Section 15.4; (iii) in the best interests of the Debtor, its estate and all holders of Claims and Interests; (iv) fair, equitable and reasonable; (v) given and made after due notice and opportunity for a hearing; and (vi) a bar to any Person asserting any claim or Cause of Action released by this Section 15.4.

Notwithstanding the foregoing, nothing in this Section 15.4 shall release any Released Party or other Entity or Person from its respective rights and obligations under the Plan or the Confirmation Order.

15.5 Bankruptcy Rule 3016 Compliance

The Debtor’s compliance with the formal requirements of Bankruptcy Rule 3016(c) shall not constitute an admission that this Plan provides for an injunction against conduct not otherwise enjoined under the Bankruptcy Code.

15.6 Exculpation

The Debtor, the Plan Administrator, the Agent, the Prepetition Lenders and each of their respective Professionals SHALL NOT BE LIABLE FOR ANY cause of action arising out of or related to any act or omission in connection with or relating to: (a) the formulation, preparation, solicitation, dissemination, negotiation, or filing of this Plan, the Plan Supplement, the Disclosure Statement, or any contract, instrument, release, or other agreement or document created or entered into in connection with any of the foregoing; (b) the Chapter 11 Case; (c) the pursuit of Confirmation of the Plan; (d) the administration and implementation of the Plan; (e) the distribution of property under the Plan; and/or (f) any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring and/or liquidation of the Debtor; provided, however, that (i) the foregoing shall not apply to claims or causes of action related to any act or omission


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that is determined in a Final Order to have constituted actual fraud, willful misconduct, or gross negligence and (ii) clauses (d), (e) and (f) shall apply to the post-Effective Date actions by the Plan Administrator only to the extent such actions are consistent with the Plan and Plan Administration Agreement. All holders of Claims and Interests are enjoined from asserting or prosecuting any Claim or cause of action against the Debtor, the Plan Administrator, the Agent, the Prepetition Lenders, or each of their respective Professionals as to any Claim or cause of action as to which the Debtor, the Plan Administrator, the Agent, the Prepetition Lenders, and each of their respective Professionals have been exculpated pursuant to this Plan.

15.7 Permanent Injunction

Except as otherwise expressly provided in this Plan and the Confirmation Order, all Persons who have held, hold or may hold Claims against, or Interests in, the Debtor are permanently enjoined, on and after the Effective Date, to the fullest extent permissible under applicable law, as such law may be extended or integrated after the Effective Date, from: (i) commencing or continuing in any manner any action or other proceeding of any kind against the Debtor, the Reorganized Debtor, or their assets with respect to any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas; (ii) the enforcement, attachment, collection, or recovery by any manner or means of judgment, award, decree or order against the Debtor, the Reorganized Debtor, or their assets on account of any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas; (iii) creating, perfecting, or enforcing any encumbrance of any kind against the Debtor, the Reorganized Debtor, or their assets on account of any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas; and (iv) asserting any right of setoff, recoupment or subrogation of any kind against any obligation due from the Debtor, the Reorganized Debtor, or their assets on account of any such Claim or Interest in any venue other than the United States Bankruptcy Court for the Southern District of Texas.

15.8 Term of Injunctions or Stay

Unless otherwise provided in the Plan or Confirmation Order, all injunctions or stays provided for in the Chapter 11 Case under Bankruptcy Code sections 105 or 362 or otherwise, and in existence on the Confirmation Date (excluding any injunctions or stays contained in the Plan or Confirmation Order), shall remain in full force and effect until the Effective Date. All injunctions or stays contained in the Plan or Confirmation Order shall remain in full force and effect in accordance with their terms.

15.9 Integral to Plan

Each of the injunctions provided in this Plan is an integral part of the Plan and is essential to its implementation. Each of the other Persons protected by the injunctions set forth in this Plan shall have the right to independently seek the enforcement of such injunctions.


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15.10 Binding Effect

The Plan shall be binding upon and inure to the benefit of the Debtor, all present and former holders of Claims against and Interests in the Debtor, its successors and assigns, including, but not limited to, the Debtor, and all other parties-in-interest in the Chapter 11 Case.

15.11 Notices

Any notice, request, or demand required or permitted to be made or provided under the Plan to or upon the Debtor or the Reorganized Debtor shall be: (i) in writing; (ii) served by (a) certified mail, return receipt requested, (b) hand delivery, (c) overnight delivery service or (d) facsimile transmission; and (iii) deemed to have been duly given or made when actually delivered or, in the case of facsimile transmission, when received and telephonically confirmed, addressed as follows:

If to the Debtor:

ECHO ENERGY PARTNERS I, LLC 909 Fannin Street, Suite 4000 Houston, TX 77010 With a copy to (which shall not constitute notice):

William A. (Trey) Wood III Bracewell LLP 711 Louisiana, Suite 2300 Houston, TX 77002 Phone: (713) 223-2300 Fax: (713) 221-1212 If to the Reorganized Debtor:

[This information will be provided in the Plan Supplement.] With a copy to (which shall not constitute notice) [This information will be provided in the Plan Supplement.] 15.12 Setoffs/Counterclaims

The Debtor may, but shall not be required to, setoff or counterclaim against any Claim and the payments or other distributions to be made pursuant to the Plan in respect of the Claim, claims of any nature whatsoever the estate may have against the holder of the Claim, but neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtor of any claim that the estates may have against the holder. Setoffs or counterclaims arising from events after the Petition Date shall reduce the payouts under any Allowed Claim dollar for dollar. Setoffs or counterclaims arising from pre-petition events shall reduce the amount of the Allowed Claim and, therefore, shall reduce the payout amount proportionally with the reduction in the


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Allowed Claim. If any counterclaim or setoff asserted by the Debtor exceeds the amount of any Claim, the holder of such Claim shall not be entitled to any distribution under the Plan, and the Debtor will reserve the right to recover any such excess counterclaim or set-off from the holder of the applicable Claim. After the Effective Date, the rights afforded to the Debtor under this paragraph shall apply to the Reorganized Debtor.

In no event shall any holder of Claims or Interests be entitled to setoff any Claim or Interest against any claim, right, or cause of action of the Debtor or the Reorganized Debtor, as applicable, unless such holder has filed a motion with the Bankruptcy Court requesting the authority to perform such setoff on or before the Confirmation Date, and notwithstanding any indication in any Proof of Claim or Interest or otherwise that such holder asserts, has, or intends to preserve any right of setoff pursuant to Bankruptcy Code section 553 or otherwise.

15.13 Recoupment

Any Holder of a Claim or Interest shall not be entitled to recoup any Claim or Interest against any Claim, right, or cause of action of the Debtor or the Reorganized Debtor, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtor on or before the Confirmation Date, notwithstanding any indication in any Proof of Claim or Interest or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.

15.14 Release of Liens

Except as otherwise provided in the Plan or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Debtor’s estate shall be fully released and discharged, and all of the right, title, and interest of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the Debtor and its successors and assigns.

15.15 Request for Expedited Tax Review

The Reorganized Debtor shall have the right to request an expedited determination under Bankruptcy Code section 505(b) with respect to tax returns filed, or to be filed, for any and all taxable periods ending after the Petition Date through the Effective Date.

15.16 No Admissions

Notwithstanding anything herein to the contrary, nothing in the Plan shall be deemed as an admission by the Debtor with respect to any matter set forth herein, including liability on any Claim.


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15.17 Entire Agreement

The Plan, the Plan Supplement and the Confirmation Order supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Plan.

15.18 Governing Law

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of the State of Texas, without giving effect to the principles of conflicts of law thereof, shall govern the construction and implementation of the Plan and any agreements, documents, and instruments executed in connection with the Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreement shall control) as well as corporate governance matters with respect to the Debtor.


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ARTICLE XVI CONFIRMATION REQUEST

The Debtor requests Confirmation of the Plan under Bankruptcy Code section 1129. If any impaired Class does not accept the Plan pursuant to Bankruptcy Code section 1126, the Debtor requests Confirmation pursuant to Bankruptcy Code section 1129(b). In that event, the Debtor reserves the right to modify the Plan to the extent (if any) that Confirmation of the Plan under Bankruptcy Code section 1129(b) requires modification.

Dated: August 14, 2020

ECHO ENERGY PARTNERS I, LLC By: /s/ DRAFT Name: Gregg Laswell Title: Chief Restructuring Officer,

Echo Energy Partners I, LLC


INTRODUCTION Under the “best interests” of creditors test set forth in section 1129(a)(7) of the Bankruptcy Code,

the Bankruptcy Court may not confirm a plan of reorganization unless the plan provides each holder of a claim or interest who does not otherwise vote in favor of the plan with property of a value, as of the Effective Date of the plan, that is not less than the amount that such holder would receive or retain if the debtor was liquidated under chapter 7 of the Bankruptcy Code. To demonstrate that the proposed Plan satisfies the “best interests” of creditors test, the Debtor, has prepared the following hypothetical liquidation analysis (the “Liquidation Analysis”), which is based upon certain assumptions discussed in the Disclosure Statement and in the accompanying notes to the Liquidation Analysis. 1

All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Disclosure Statement Relating to the Debtors’ Joint Prepackaged Plan of Reorganization Pursuant to Chapter 11 of The Bankruptcy Code (the “Disclosure Statement”) to which this Liquidation Analysis is attached.

Statement of Limitations:

The determination of the costs of, and proceeds from, the hypothetical liquidation of the Debtor’s assets in a chapter 7 case is an uncertain process involving the extensive use of significant estimates and assumptions that, although considered reasonable by the Debtor based upon their business judgment and input from their advisors, are inherently subject to significant business, economic, and competitive uncertainties and contingencies beyond the control of the Debtor. Inevitably, some assumptions in the Liquidation Analysis would likely not materialize in an actual chapter 7 liquidation, and unanticipated events and circumstances could materially affect the ultimate results in a chapter 7 liquidation. The Liquidation Analysis was prepared for the sole purpose of generating a reasonable good faith estimate of the proceeds that would be generated if the Debtor’s assets were liquidated in accordance with chapter 7 of the Bankruptcy Code. The Liquidation Analysis is not intended and should not be used for any other purpose. The underlying financial information in the Liquidation Analysis was not compiled or examined by independent accountants. NEITHER THE DEBTOR NOR THEIR ADVISORS MAKE ANY REPRESENTATION OR WARRANTY THAT THE ACTUAL RESULTS WOULD OR WOULD NOT APPROXIMATE THE ESTIMATES AND ASSUMPTIONS REFLECTED IN THE LIQUIDATION ANALYSIS. ACTUAL RESULTS COULD VARY MATERIALLY.

In preparing the Liquidation Analysis, the Debtor estimated Allowed Claims based upon a review of the Debtor’s financial statements to account for estimated liabilities as necessary. In addition, the Liquidation Analysis includes estimates for Claims not currently asserted in the chapter 11 Cases, but which could be asserted and allowed in a chapter 7 liquidation, including unpaid chapter 11 Administrative Claims, and chapter 7 Administrative Claims such as wind down costs and trustee fees and tax liabilities. To date, the Bankruptcy Court has not estimated or otherwise fixed the total amount of Allowed Claims used for purposes of preparing this Liquidation Analysis. Therefore, the Debtors’ estimate of Allowed Claims set forth in the Liquidation Analysis should not be relied on for any other purpose, including determining the value of any distribution to be made on account of Allowed Claims and Interests under the Plan.

NOTHING CONTAINED IN THE LIQUIDATION ANALYSIS IS INTENDED TO BE OR CONSTITUTES A CONCESSION OR ADMISSION BY THE DEBTOR. THE ACTUAL AMOUNT OF

1 Terms used but not defined herein have the meaning set forth in the Disclosure Statement.

#6219319


ALLOWED CLAIMS IN THE CHAPTER 11 CASES COULD MATERIALLY DIFFER FROM THE ESTIMATED AMOUNTS SET FORTH IN THE LIQUIDATION ANALYSIS.

Chapter 7 Conversion Date and Appointment of Chapter 7 Trustee:

The Liquidation Analysis has been prepared assuming that the Debtors’ chapter 11 cases are converted to chapter 7 cases on or about October 2, 2020 (the “Chapter 7 Conversion Date”), which the Debtor estimates to be a reasonable proxy for the Effective Date. As of the Chapter 7 Conversion Date, the Debtor is expected to have liquidated all of its assets and only have cash and any causes of action as assets owned by the estate. Additionally, the Debtor is forecasting to make disbursements to the Prepetition Secured Lender and assign properties back to holders of Other Secured Claims. It is assumed that, on the Chapter 7 Conversion Date, the Bankruptcy Court would appoint a chapter 7 trustee (the “Trustee”) who would sell all of the Debtors’ remaining assets and distribute the cash proceeds, net of liquidation-related costs, to creditors in accordance with applicable bankruptcy law. There can be no assurance that the recoveries realized from the sale of the assets would, in fact, approximate the amounts reflected in this Liquidation Analysis. Under section 704 of the Bankruptcy Code, the Trustee must, among other duties, collect and convert the property of the estate as expeditiously as possible (generally at distressed prices), taking into account the best interests of stakeholders.

Global Notes & Assumptions:

The Liquidation Analysis should be read in conjunction with the following notes and assumptions:

1. Dependence on unaudited financial statements – The Liquidation Analysis contains numerous estimates. Proceeds available for recovery are based upon the Debtors’ unaudited books and records and a forecast of net cash-flows leading up to the Chapter 7 Conversion Date.

2. Chapter 7 Liquidation Costs & Length of Liquidation Process – Pursuant to section 726 of the Bankruptcy Code, the allowed administrative expenses incurred by the Trustee, including expenses associated with selling the Debtors' assets, would be entitled to payment in full prior to any distributions to chapter 11 Administrative Claims and Priority Tax Claims. The estimates used in the Liquidation Analysis for the Trustee are pursuant to the fee guidelines in section 326(a) of the Bankruptcy Code. It is assumed the chapter 7 Administrative Claims and Priority Claims, post-chapter 7 conversion expenses and professional fees, and the Trustee fees are entitled to payment in full prior to distribution to Holders of any other Claims.

3. Preference or fraudulent transfers – No recovery or related litigation costs have been attributed to any potential avoidance actions under the Bankruptcy Code, including potential preference or fraudulent transfer actions due to, among other issues, the costs of such litigation, the uncertainty of the outcome, and anticipated disputes regarding these matters.

4. Distribution of Net Proceeds – Chapter 11 Administrative Claim amounts and Priority Tax Claim amounts, trustee fees and other such Claims that may arise in a liquidation scenario would be paid in full from the liquidation proceeds before the balance of those proceeds can be made available to pay General Unsecured Claims. Under the absolute priority rule, no junior creditor would receive any distribution until all senior creditors are paid in full, and no equity holder would receive any distribution until all creditors are paid in full. The assumed distributions to creditors as reflected in the Liquidation Analysis are estimated in accordance with the absolute priority rule.


Conclusion:

The Debtors have determined, based on the following analysis, that upon the Effective Date, the Plan will provide all creditors and equity holders with a recovery (if any) that is not less than what they would otherwise receive pursuant to a liquidation of the Debtors under chapter 7 of the Bankruptcy Code, and as such believe that the Plan satisfies the requirement of section 1129(a)(7) of the Bankruptcy Code.


NET PROCEEDS AVAILABLE FOR DISTRIBUTION

SUMMARY OF ESTIMATED CLAIMS RECOVERY

Echo Energy Partners I, LLCLiquidation

Estimated NBV Estimated RecoveryNotes % $

Assets at Conversion Date:Cash & Cash Equivalents A 5,616,347$ 100% 5,616,347$ Other Assets B Unknown Unknown

Gross Liquidation Proceeds 5,616,347$

Liquidation Adjustments:Wind-Down Costs C (355,000) Trustee Fees D (168,460) Subtotal (523,460)$

Net Liquidation Proceeds Available for Distribution at Conversion Date 5,092,887$

Estimated distributions made prior to Conversion Date E 35,746,799

Total Net Liquidation Proceeds to Estate 40,839,685$

Echo Energy Partners I, LLCLiquidation Plan

Estimated Recovery Estimated RecoveryNotes Claims Estimate % $ % $

Administrative Claims F 5,687,968$ 100% 5,687,968$ 100% 5,687,968$ Priority Tax Claims G 9,785 100% 9,785 100% 9,785 Priority Claims H - n/a - n/a -

Sub-Total 5,697,753 5,697,753 Net Liquidation Proceeds Available for Secured Claims 35,141,932

Other Secured Claims I 7,682,842 n/a 7,682,842 100% 7,682,842 Prepetition Lenders' Secured Claims J 80,448,980 34% 27,459,090 34% 27,627,550

Sub-Total 88,131,822 35,141,932 Net Liquidation Proceeds Available for Unsecured Claims -

General Unsecured Claims K 52,989,890 0% - 0% - Subordinated Claims L - n/a - n/a - Interests M - n/a - n/a - Total Estimated Claims and Recoveries 146,819,466$ 40,839,685$


Specific Notes to the Liquidation Analysis:

Gross Liquidation Proceeds -

A. Cash & Cash Equivalents Cash and Cash Equivalents consist of all operating cash held by the Debtors. The pro-forma balance is based on the Debtor’s forecast cash balance as of the Chapter 7 Conversation Date, October 2, 2020, which is expected to be fully recoverable. The pro-forma cash balance is net of the DIP repayment and any disbursements made to the Prepetition Secured Lenders. Additionally, the pro-forma cash balance assumes the Debtor is able to collect all currently outstanding accounts receivable and is reimbursed for any prepaid expenses for which a recovery is entitled prior to the Chapter 7 Conversion Date.

B. Other Assets Other Assets consist of any causes of action available to the Debtor as of the Chapter 7 Conversion Date. At this time, the estimated value of these claims in unknown.

Liquidation Adjustments –

C. Wind-Down Costs Wind-Down Costs consist of all reasonable and necessary expenses that at chapter 7 trustee would incur to liquidate the Debtor. Costs include payment to professionals and financial advisors to resolve any claims, prepare a final tax return, retain documents, etc.

D. Trustee Fees Compensation for the chapter 7 Trustee would be limited to fee guidelines in section 326(a) of the Bankruptcy Code. The Debtors have estimated trustee fees based on the fee guidelines as provided by the US Trustee.

E. Estimated Distributions made Prior to the Chapter 7 Conversion Date Amounts represent the value of all distributions of cash or property made to holders of allowed claims prior to the Chapter 7 Conversion Date. These amounts have been included to illustrate the total recoveries of the various classes of claims in a chapter 7 scenario.

Claims –

F. Administrative Claims Administrative Claims consist of approximately $1.9 million of unpaid chapter 11 professional fees incurred after the Petition Date and $3.8 million of DIP Claims. The Liquidation Analysis projects a recovery rate of 100%.

G. Priority Tax Claims Priority Tax Claims consist of unpaid property taxes. The Liquidation Analysis projects a recovery rate of 100%.

H. Priority Claims There are currently no Other Priority Claims. To the extent such claims exist, the projected recovery is 100%.


I. Other Secured Claims Other Secured Claims consist of unpaid joint-interest-billings and other well costs incurred on wells in which the Debtor previously owned working interests. Holders of Other Secured Claims received their secured collateral in return for their claim. For purposes of this analysis, the value of the secured collateral returned to claim holder is assumed to be equal to the value of the claim. As such, holders of Other Secured Claims are expected to receive a recovery of 100%.

J. Prepetition Lenders’ Secured Claims The Prepetition Lenders’ Secured Claims consist of $80.4 million in unpaid principal, interest and fees owed under Prepetition Credit Agreement. The Liquidation Analysis projects a recovery rate of 33% for holders of Prepetition Lender Secured Claims.

K. General Unsecured Claims General Unsecured Claims consist of the Prepetition Lenders’ Deficiency Claim and any other general unsecured claims that arise. The Liquidation Analysis projects no recovery for General Unsecured Claims.

L. Subordinated Claims Subordinated Claims consist of all claims subject to equitable subordination as determined by the Bankruptcy Court. The Liquidation Analysis projects no recovery for General Unsecured Claims.

M. Interests Interests represent any ownership interest in the Debtor represented by shares of stock, or membership or partnership interest in the Debtors, including, to the extent provided by applicable law, any warrant, option, or other security to acquire any of the foregoing. Interests are expected to receive zero recovery.


Creditor Name Address City State Zip Date of Payment Total

Cartesian Equity Management LLC 1209 Orange Street Wilmington DE 19801 2/12/2018 15,827.45

Cartesian Equity Management LLC 1209 Orange Street Wilmington DE 19801 3/5/2018 11,941.66

CASILLAS OPERATING LLC PO BOX 3668 TULSA OK 74101 2/19/2020 148,016.73

CONTINENTAL RESOURCES INC. PO BOX 268835 OKLAHOMA CITY OK 73126 1/14/2020 251,678.18

CONTINENTAL RESOURCES INC. PO BOX 268835 OKLAHOMA CITY OK 73126 1/24/2020 55,745.53

CONTINENTAL RESOURCES INC. PO BOX 268835 OKLAHOMA CITY OK 73126 1/28/2020 1,207,533.60

ECHO E&P LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 02/22/2018 484,719.54

ECHO E&P LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73103 02/05/2018 5,090,116.15














































ECHO ENERGY, LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 4/20/2018 237,820.53

ECHO ENERGY, LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 10/18/2019 549.62

ECHO INVESTMENT PARTNERS, LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 2/28/2018 33,421.55

ECHO INVESTMENT PARTNERS, LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 3/28/2018 3,208,333.33









EOG RESOURCES INC. 3817 NW EXPRESSWAY, SUITE 500 OKLAHOMA CITY OK 73112 1/21/2020 39,442.24

EOG RESOURCES, INC. 3817 NW EXPRESSWAY, SUITE 500 OKLAHOMA CITY OK 73112 3/9/2020 8,904.23

HALL ESTILL HARDWICK GABLE 100 North Broadway Ave., Suite 2900 OKLAHOMA CITY OK 73102 2/19/2020 28,128.87

John Young Redacted 10/15/2019 50,000.00



MAP2009 OK PO BOX 248833 OKLAHOMA CITY OK 73124 1/22/2020 1,725.00

MIDFIRST BANK 5800 N. WESTERN AVENUE OKLAHOMA CITY OK 73118 1/6/2020 10.00

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Creditor Name Address City State Zip Date of Payment Total






OKLHOMA SECRETARY OF STATE 421 NW 13TH, SUITE 210 OKLAHOMA CITY OK 73103 2/20/2020 25.00

OVINTIV MID CONTINENT INC. 370 17TH STREET, SUITE 1700 DENVER CO 80202 2/11/2020 184,693.06

Southern Echo LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 2/12/2018 15,290.59

Southern Echo LLC 120 Robert S Kerr Avenue, Suite 701 OKLAHOMA CITY OK 73102 3/5/2018 11,539.36

T2 LAND RESOURCES, LLC PO BOX 1263 FORT WORTH TX 76101 1/31/2020 55,880.37

TEXAS CAPITAL BANK N.A. PO BOX 224315 DALLAS TX 75222 1/10/2020 322.15

TEXAS CAPITAL BANK N.A. PO BOX 224315 DALLAS TX 75222 1/21/2020 360,960.56

TEXAS CAPITAL BANK N.A. PO BOX 224315 DALLAS TX 75222 2/11/2020 346.51

TEXAS CAPITAL BANK N.A. PO BOX 224315 DALLAS TX 75222 3/5/2020 379,106.20

WALLACE FAMILY PARTNERSHIP LP 508 W. Wall Street, Suite 1200 Midland TX 79701 9/12/2019 739.70

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