Sandridge Energy Inc. filed for Ch-11 bankruptcy in the U.S. Bankruptcy Court of Houston on reaching a debt-to-equity swap agreement with creditors. The swap would give its existing creditors control of the re-organized company.
Sandridge, which is the latest victim of falling oil prices, intends to finance its operations without securing a bankruptcy or a DIP loan. The company intends to conduct business normally whilst undergoing restructuring and intends to pay its operating expenses associated with production activities, royalties and wages to its workers and also intends to pay all of its suppliers and vendors.
At the time of filing for bankruptcy, the company had assets of $7bn and debt of about $4bn.
SandRidge is advised by law firm Kirkland & Ellis LLP, which is handling the chapter 11 case, and Houlihan Lokey Inc. is the company’s financial adviser.
U.S-based oil and gas producer Chaparral Energy Inc. has reached a temporary agreement with lenders, buying it additional time to complete negotiations.
As per a regulatory filing, Chaparral stated that it had reached a forbearance agreement with senior bond holders and other lenders who agreed to not exercise their right to call the notes at least until 15 April 2016.
Previously, Chaparral missed an interest payment of $16.5m despite a 30-day grace period after its independent auditors had “substantial doubts” over the company’s ability to continue as a going concern.
Chaparral owed $1.6bn in debt to creditors as of December 2015. The company had drawn another $141m in February, maximizing its credit limit. Cash on the company’s books as of March 2016 was $176m.
U.S-based oil and gas explorer Ultra Petroleum Corp., deferred making an interest payment of approximately $26m on its 6.125% bonds due 2024. The payment was due to creditors on 1 April 2016.
The company, as per its indenture governing the 2024 notes, permits it a grace period of 30 days to make the interest payment.
Failure to either make a payment within the grace period, or obtain a waiver from the bond holders of the 2024 notes would result in a technical default.
India-based steel and energy company Jindal Steel and Power Ltd. (JSPL) avoided a default on its debt as it reached an agreement with lenders to refinance part of its debt under India’s 5/25 restructuring norms. The 5/25 scheme in India allows banks to extend long-term loans of 20-25 years to match the cash flow of projects, while refinancing them every five or seven years.
According to sources, lenders have agreed to restructure INR 2,500m (USD 377.3m) of its INR 450,000m (USD 6.7bn) debt, without disclosing further details.
Amongst others, lenders to JSPL are as follows:
- Axis Bank
- Bank of Maharashtra
- EXIM Bank
- HDFC Bank
- Andhra Bank
- Corporation Bank
- Punjab and Sindh Bank
US-based E&P company Goodrich Petroleum Corp. reached an agreement with lenders based on a prepackaged plan to file for Chapter 11 bankruptcy protection by 15 April 2016..
The prepackaged plan, which aimed to secure support from all lenders prior to filing for Chapter 11 bankruptcy, fell short of desired participation levels. As on 31 March 2016, the company received support from its unsecured lenders totaling 61% of the 95% needed to implement its debt-for-equity exchange offer.
The new plan of re-organization aims to give its second-lien lenders an equity stake in the re-organized company through its ongoing debt-for-equity exchange offer. The company has extended its offer to 8 April 2016.
Separately, Goodrich announced earlier in March 2016, that it would delay the filing of its annual report for 2015 citing a material loss that auditors had detected which would affect the company’s ability to operate as a going concern.
Major oil producers led by Russia and Saudi Arabia planned on concluding their preliminary talks on freezing crude oil output by 1 March 2016, states Russia’s energy minister Alexander Novak. A meeting with major oil producers concluded in Doha, Qatar, this week.
A conclusive agreement with all oil producing nations could see output falling by 1.3m barrels per day, in line with average daily output of January 2016.
Saudi Arabia, Russia, Qatar and Venezuela have jointly agreed to freeze output to levels observed in Janauary 2016 if other nations agree to do so.
Iran welcomed the move but has not yet formally committed itself to reducing its output. Its Deputy Oil Minister Rokneddin Javadi stated on Saturday that Iran would aim to increase its output to 700,000 barrels per day in the coming months.
Oil output excluding Iran is expected to decline provided other nations resort to reduced production, according to Alexey Texler, Russia’s Deputy Energy Minister.