Oil and fuel driller Templar Strength has filed for Chapter eleven personal bankruptcy to effectuate a sale of its property amid plunging commodity selling prices.
The organization experienced started the sale course of action in February, attracting a dozen indications of curiosity by mid-April. But it said Monday that it experienced decided to use the personal bankruptcy course of action to consummate a sale.
Due to the fact February, “the volatility in oil and pure fuel marketplaces has been exacerbated by the unexpected mixed impression of the COVID-19 pandemic and the oil cost war between Saudi Arabia and Russia, with oil selling prices descending to the lowest level considering that 2002,” CEO Brian Simmons said in a court docket declaration.
“Independent oil and fuel organizations such as [Templar] have been especially really hard-strike, as their revenues generally are generated from the sale of unrefined oil, pure fuel, and [pure fuel liquids],” he pointed out.
Templar has exceptional funded financial debt obligations of approximately $426 million that mature in September. Creditors have agreed to offer it with $25 million in funding to retain it operating in Chapter eleven.
As Purely natural Gas Intelligence experiences, Templar is “joining a rising record of distressed operators amid the sharpest oil market downturn in recent memory.”
“It seems no oil-creating area of the United States is risk-free from the carnage, as evidenced by the Chapter eleven filings of Bakken Shale heavyweight Whiting Petroleum Inc. and Wyoming-concentrated Ultra Petroleum Corp.,” NGI extra.
Templar, which was established in 2012 by former CEO David Le Norman, focuses on the growth and acquisition of crude oil and pure fuel reserves in the Better Anadarko Basin of northeastern and western Oklahoma and the Texas Panhandle.
As of Might 2020, it was creating about 18,000 barrels of oil equivalent for each working day (Mboe/d), down from 21,000 Mboe/d in December.
An out-of-court docket restructuring in 2016 eliminated $1.45 billion in next-lien financial debt and injected $365 million of fairness capital into the organization. “Based on the strong engagement by bidders during the prepetition course of action, the debtors are hopeful for an lively auction course of action,” Simmons said.