Oil and gas driller Templar Energy has submitted for Chapter 11 individual bankruptcy to effectuate a sale of its assets amid plunging commodity rates.
The firm experienced started the sale procedure in February, attracting a dozen indications of fascination by mid-April. But it claimed Monday that it experienced made the decision to use the individual bankruptcy procedure to consummate a sale.
Since February, “the volatility in oil and organic gas marketplaces has been exacerbated by the sudden merged influence of the COVID-19 pandemic and the oil selling price war in between Saudi Arabia and Russia, with oil rates descending to the lowest degree considering that 2002,” CEO Brian Simmons claimed in a court declaration.
“Independent oil and gas corporations these types of as [Templar] have been specially hard-strike, as their revenues generally are created from the sale of unrefined oil, organic gas, and [organic gas liquids],” he famous.
Templar has remarkable funded credit card debt obligations of close to $426 million that experienced in September. Creditors have agreed to deliver it with $twenty five million in funding to preserve it operating in Chapter 11.
As Purely natural Gas Intelligence studies, Templar is “joining a increasing listing of distressed operators amid the sharpest oil current market downturn in new memory.”
“It appears no oil-producing region of the United States is safe from the carnage, as evidenced by the Chapter 11 filings of Bakken Shale heavyweight Whiting Petroleum Inc. and Wyoming-concentrated Ultra Petroleum Corp.,” NGI included.
Templar, which was launched in 2012 by previous CEO David Le Norman, focuses on the development and acquisition of crude oil and organic gas reserves in the Better Anadarko Basin of northeastern and western Oklahoma and the Texas Panhandle.
As of Might 2020, it was producing about eighteen,000 barrels of oil equivalent for each day (Mboe/d), down from 21,000 Mboe/d in December.
An out-of-court restructuring in 2016 eradicated $1.forty five billion in second-lien credit card debt and injected $365 million of fairness cash into the firm. “Based on the sturdy engagement by bidders through the prepetition procedure, the debtors are hopeful for an energetic auction procedure,” Simmons claimed.