March 14, 2016 / 5:13 PM / 2 years ago

Debt deadlines loom for SandRidge, Venoco and Energy XXI

An electronic display identifies the post that trades SandRidge Energy stock on the floor of the New York Stock Exchange, January 11, 2013. REUTERS/Brendan McDermid

NEW YORK (Reuters) - The first major upstream oil and gas bankruptcy filing of the year could occur this week as SandRidge Energy Inc, Venoco Inc [DNVRPV.UL] and Energy XXI Ltd reach the end of grace periods following millions in missed interest payments.

The three oil and gas exploration and production companies with operations across the United States, said they would skip a total of $44.2 million in interest payments last month, as they negotiated debt restructurings with creditors.

Their decisions kicked off month-long grace periods. Under many credit agreements, lenders can call all their debt due after the end of the grace period, potentially pushing the companies into bankruptcy.

Venoco and Energy XXI could not immediately be reached for comment. SandRidge declined to comment on the grace period.

If either SandRidge or Energy XXI file for bankruptcy they would be among the biggest victims of the nearly two-year-long oil selloff, which has seen dozens of companies go under, tens of thousands of jobs axed and corporate spending slashed.

Before a rebound in the past two months, crude oil prices fell 75 percent from mid-2014 highs above $100 a barrel to 12-year lows of about $26 for WTI and around $27 for global benchmark Brent.

SandRidge currently has 717 employees, Energy XXI had 378 employees at June 30, and Venoco had 158 employees at the end of 2014.

SandRidge has total debts of around $4 billion and Energy XXI owes approximately $3.3 billion. Venoco owes $565 million.

One of the options SandRidge was considering when it announced it hired restructuring advisors earlier this year was a prepackaged bankruptcy. Energy XXI has said in filings it may file for bankruptcy if oil prices remain low.

More than 40 energy-related companies sought court protection from their creditors in 2015. The bankruptcies have been slow and tortuous. Assets have been sold at depressed prices.

Offshore driller Paragon Offshore Plc has been the only major energy-related bankruptcy filing this year, but roughly a third of U.S. oil producers, or 175 firms, is at risk of slipping into Chapter 11, according to a study by Deloitte, the auditing and consulting firm.

More than a dozen companies rated “B-” or below in the stressed energy sector must also come up with the cash to make interest payments March 15, according to data from Fitch Ratings.

The companies include Chesapeake Energy Corp, which has an approximately $400 million maturity due according to Thomson Reuters data. Others are Linn Energy LLC, which is already working with restructuring advisors and California Resources Corp. All three companies worked out debt swaps with investors last year to try to reduce their debt loads and interest expenses.

Goodrich Petroleum Corp has already said it will not make $12.2 million in interest payments due March 15, and $2.8 million in payments due April 1.

The company is offering equity to its holders of preferred stock and unsecured notes in an exchange offer that expires March 16. If the holders do not participate, Goodrich said it is likely to file for Chapter 11 bankruptcy, in which those holders will probably receive nothing.

Reporting by Jessica DiNapoli in New York; Editing by Carmel Crimmins and Grant McCool

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below