SandRidge Energy Files for Bankruptcy
May 16 2016 - 9:50AM
Dow Jones News
SandRidge Energy Inc. became the latest victim of the prolonged
downturn in energy sector, filing for bankruptcy protection Monday
after reaching a deal with its creditors to swap $3.7 billion in
debt for control of the oil and gas company.
The Oklahoma City company filed for chapter 11 protection in
U.S. Bankruptcy Court in Houston after reaching a deal with the
majority of its lenders and bondholders on the terms of a
"prearranged" debt restructuring pact.
SandRidge Chief Executive James Bennett said the proposed debt
swap, which requires court approval, will allow the reorganized
company to concentrate on oil and gas exploration and development
in our active Oklahoma and Colorado project areas.
The company will stay open during the chapter 11 case and
expects to exit bankruptcy "with minimal disruption to our
business," Mr. Bennett said.
SandRidge says it has enough cash to fund its ongoing operations
without a bankruptcy loan. Among its initial bankruptcy request is
the authority to pay operating expenses associated with production
activities, royalties and wages to its workers. The company also
intends to pay all suppliers and vendors in full during the
bankruptcy.
SandRidge joins the ranks of oil and gas drillers to file for
bankruptcy in recent weeks as the low oil prices continue to roil
the energy sector. Linn Energy, Midstates Petroleum Co. and Ultra
Petroleum Corp. have all recently filed for bankruptcy in Texas.
Also, Breitburn Energy Partners LP filed for bankruptcy Monday in
New York.
Those companies join Samson Resources Corp., Magnum Hunter
Resources Corp., Emerald Oil Inc., Swift Energy Co., and dozens
more that had earlier sought bankruptcy.
SandRidge drills for oil and gas in Oklahoma, Kansas and Texas,
where it has 4,411 gross producing wells and more than 2 million
gross acres under lease. As of Dec. 31, it had four rigs in
operation.
At the end of last year, the company employed more than 1,100
people but has since reduced its head count to 864. The company
listed assets of $7 billion and debts about $4 billion in papers
filed with the bankruptcy court.
The law firm Kirkland & Ellis LLP is handling the chapter 11
case, and Houlihan Lokey, Inc. is SandRidge's financial
adviser.
Stephanie Gleason contributed to this article
Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com
(END) Dow Jones Newswires
May 16, 2016 09:35 ET (13:35 GMT)
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