Coho Energy Emerges from Chapter 11; Company Reorganizes with New Owners, New Prime Lender and New Management.

Business Editors

DALLAS--(BUSINESS WIRE)--April 10, 2000

PPM America, Oaktree Capital, Appaloosa

Management Acquire 90% of Equity

Coho Names Michael McGovern, Experienced

Oil & Gas Turnaround Specialist, as New CEO 

Coho Energy, Inc. (NASDAQ: CHOH), which has been operating under Chapter 11 since last August, reports that it has consummated a successful plan of reorganization, bringing the oil and gas company out of bankruptcy with new ownership, new senior management and a major new bank facility.

Coho and five of its affiliates filed for bankruptcy protection last August 23. At the time, Coho listed total liabilities of approximately $425 million. Under the reorganization plan, Coho's three largest institutional bondholders converted their debt into approximately 90% of the equity of the reorganized company. These bondholders also provided the majority of the $72 million of subordinated notes, as provided under the plan of reorganization. The three bondholders are Appaloosa Management, LP, Oaktree Capital Management, LLC, and PPM America.

Coho's "old" public shareholders will receive 4% of the equity in the reorganized company. The "old" equity holders, as of record date of February 7, 2000, will also receive distributions, if and when certain events occur, from the sale of specific Coho assets and after the resolution of existing litigation. The company stock will trade on NASDAQ over the counter with the symbol CHOH.

Chase Manhattan Bank is providing Coho with a new bank facility in the amount of $250 million.

Coho's new Board of Directors elected Michael McGovern as chief executive officer. Mr. McGovern has completed several turnarounds in the oil and gas sector. He previously held CEO positions with Edisto Resources Corporation/Convest Energy Corporation and American National Petroleum Co. Since 1998, he has been a managing director with Pembrook Capital Corp. in Houston, assisting distressed energy companies. Earlier in his career he held management posts at two NYSE-traded energy companies, Freeport-McMoRan and the Louisiana Land and Exploration Company.

Mr. McGovern has already filled several top posts at Coho. Gary Pittman, formerly chief financial officer at Bell Geospace, Inc. in Houston who worked with Mr. McGovern at Convest Energy and Edisto Resources, becomes Coho's new CFO. Gerald Ruley, who has been with Coho and served as District Manager in both the Gulf Coast and Mid-Continent areas, will be in responsible for all phases of operations. Mr. Ruley is an experienced low cost operator, having worked with both major and large Independent companies.

"This is a positive outcome for Coho," said Stuart Lissner, a managing director at PPM America, who chaired the unsecured creditors committee. "The company has emerged from bankruptcy with a healthier balance sheet and a strong group of financial partners. "We're especially pleased to have Mike McGovern at the helm," Mr. Lissner added. "Mike is a proven manager who has successfully completed several turnarounds. He heads an experienced team that will focus on increasing production and cash flow."

Coho currently produces around 10,300 barrels of oil equivalent a day (BOE), and has approximately 114 million barrels of proven barrel of oil equivalent reserves, two-thirds of which are developed. It operates the majority of its producing fields.

"Our primary focus is to ramp up production and generate cashflow - the positive news is that we have the properties, the staff and the financial resources to accomplish our objective," said Mike McGovern.

Note on Coho Representation

In addition to Stuart Lissner of PPM America, the Coho creditors committee included Ron Goldstein of Appaloosa Management and Tim Andrews of Oaktree Capital. Tom Walper of the Los Angeles laws firm Munger, Tolles & Olson, was legal advisor to the committee. Andy Rahl of the New York law firm Andersen, Kill & Olick represented the bondholders and others with respect to the $72 million exit financing. Louis Strubeck of the Dallas law firm of Fulbright & Jaworski was Coho's bankruptcy counsel. The investment banking firm of Petrie Parkman & Co. acted as financial advisor to the Committee.