SandRidge joins the ranks of oil and gas drillers to file for bankruptcy in recent weeks as low oil prices continue to roil the energy sector. The Chapter 11 cases will accommodate the restructuring of the company’s balance sheet.
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Breitburn said it has been in talks with bondholders about a balance-sheet restructuring. That would leave Breitburn as a stronger, deleveraged, and recapitalized enterprise.
In a statement released Monday, the company said the continued decline of commodity prices has made Breitburn’s existing debt burden “unsustainable”, though the company’s portfolio of diverse assets “continues performing in line with our expectations”. Taking this action now gives us flexibility in maximizing the value of the ongoing business.
SandRidge said it plans to liquidate about $600 million in cash.
Breitburn’s hedging assets, contracts that cushion the company’s cash holdings against price volatility, will be a central factor in restructuring talks, according to the court papers.
The company says it had asked the court for permission to continue day-to-day operations.
Additional information, including court filings, regarding Breitburn’s restructuring is available at https://cases.primeclerk.com/breitburn or by contacting Breitburn’s proposed notice and claims agent at 855-851-7887 (for toll-free domestic calls) and 917-258-6103 (for tolled global calls) or by email at [email protected].
The company has a significant footprint in California, with operations in the Los Angeles Basin and, since November 2012, oil properties located in the Belridge Field in the San Joaquin Basin in Kern County, which it acquired from American Energy Operations Inc.
In bankruptcy, however, a dispute is brewing with Breitburn’s senior lenders, many of whom are also counterparties to the hedge agreements.
SandRidge said last week it would not be able to file financial results for the quarter ended March 31 on time.
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Shares of the energy exploration and production company have plummeted over the past year, as the price of oil sank and losses mounted.
