Connacher Files for Creditor Protection
Junior oil sands producer Connacher Oil and Gas Ltd filed for protection from creditors at an Alberta court on Monday, making it the latest Canadian victim of the two-year slump in global crude prices.
The Calgary-based company said depressed oil prices and difficulties accessing capital markets had prompted directors to seek protection under the Companies' Creditors Arrangement Act (CCAA).
CCAA is an insolvency law in Canada that allows companies to restructure their finances and stay in business.
Connacher temporarily cut production at its Great Divide oil sands project in northern Alberta earlier in the first quarter of this year to around 3,000-4,000 barrels per day from 8,000 bpd in response to tumbling oil prices.
The company also briefly shut some production two weeks ago as a precaution against a massive wildfire burning around Fort McMurray.
Connacher said some of its existing lenders had committed to providing up to $20 million in interim financing to support operations, and obligations will continue to be met as it goes through the CCAA process.
(Reporting by Nia Williams; Editing by Sandra Maler)
