Shale producer Goodrich Petroleum has filed bankruptcy protection on Friday with the goal of eliminating nearly $400 million debt as the gas and oil industry plummeted.
Goodrich Petroleum is the latest company to file court protection against creditors amidst the shakeout in the industry that started almost a year ago, Reuters reported. The filing was done in Southern District of Texas, Houston. The Chapter 11 petition listed the company's $99 million assets against its $507 million to $1 billion debt. In the statement, Goodrich Petroleum said that their operation would resume as normal; but the royalties, wages and expenses would be paid through the court restructuring process.
The deal would "substantially de-leverage its capital structure and strategically position the company for long-term performance in an anticipated improving commodity price environment," Goodrich Petroleum in the statement.
According to WSJ, Goodrich Petroleum had a deal with a group of investors, who own bonds last year in exchange of erasing its $400 million debt. Bondholders, including Franklin Advisors Inc., Penn Capital Management and Jefferies LLC, had agreed to give up $175million in debt in return for their ownership. Goodrich Petroleum's bankruptcy petition followed the unsuccessful debt-for-equity swap that would align its balance sheet.
According to Goodrich Petroleum's statement, all their debt would be wiped except for the $40 million senior bank debt. The company also added that their loss was rooted down to weak asset writedowns, Express News has learned.
At the beginning of 2015, nearly 60 oil and gas company have declared bankruptcy, claiming almost $20 billion in debt. Goodrich Petroleum, operating in Texas, Louisiana and Mississippi, was the next shale company to seek protection against creditors after Magnum Hunter resources Corp. Energy XXI Ltd. Has also filed for bankruptcy on April 14, Thursday. Last month, Venoco Inc furnished an agreement with Apollo Global management an has filed for bankruptcy.
With the bankruptcy filing of Goodrich Petroleum, it aims to lessen effort to reduce leverage and maintain liquidity during the restructuring.
