Lots of understandable outrage on $WLL. I agree we have many bad actors here (execs & board for sure, seemingly noteholders too). In an effort to say something new, at least some of the problem here, IMO, is the US bankruptcy system and overlay with E&P. 1/6

BK system here offers “automatic stay” – keeping creditors abreast while the co has exclusive right to propose a plan of reorg for at least 120 days. System grew out of capitalist economy, with intent to give co’s a chance to recover vs liquidate. But it’s grossly abused. 2/6

During that exclusivity period the co will likely burn $10MM or more per month on restructuring fees – much higher in bigger cases. And if creditors fight the co the process (and fees), that can drag out. I once worked on a deal for 7+ years. 3/6

The diff between Ch11 (reorg) an Ch7 (liquidation) is less pronounced here IMO. E&Ps don’t make widgets, so just producing their oil is akin to liquidation. Totally agree WLL should blow down PDP given $10 basin pricing, limited inventory and crappy drilling economics at $50. 4/6

What few get right (looking at you noteholders) is the damage every dollar of overhead does to PDP economics. Too many in industry say, “Oh that sold for PDP value” when in fact the PV10 (if that’s the right discount rate) of 5-10 yrs of overhead often halves the “PDP value”. 5/6

Pulling this together, my hope for what may have happened with $WLL is that consenting noteholders held their nose to get a deal done, to limit fee burn and get control. Once the co is out and they control the board, then burn it the f*ck down. Pitchforks ready. 6/6