Seventy Seven Energy to File for Bankruptcy Amid Oil Slump
Oilfield services company Seventy Seven Energy Inc said it intended to file for a prepackaged Chapter 11 bankruptcy on or before May 26, the latest energy company to seek bankruptcy protection amid a prolonged oil price slump.
The company, which was spun off from Chesapeake Energy Corp in 2014, said it had entered into a restructuring agreement with certain lenders that would allow it to convert about $1.1 billion of its debt into equity.
A more than 60 percent fall in global oil prices since mid-2014 has forced about 50 North American oil and gas producers to seek bankruptcy protection.
Weak oil prices have also prompted oil producers to severely curtail spending, weighing on demand for the oilfield services provided by companies such as Seventy Seven Energy.
Chesapeake Energy Corp, the company's former parent, surprised investors last Monday, when it said lenders had allowed it to keep its $4 billion borrowing base, despite concerns about its liquidity position.
Baker Botts LLP is Seventy Seven Energy's legal counsel and Lazard Freres & Co LLC is the financial adviser. Alvarez & Marsal is the company's restructuring adviser.
(Reporting by Swetha Gopinath in Bengaluru)
