Sabine Oil & Gas Corp., Houston, which drills for oil and gas in Texas and Louisiana, has decided to skip a $21 million interest payment and enter a 30-day grace period to either make the payment or slip into a debt default.
The $21 million was a semiannual interest payment on corporate bonds that come due in 2019. The bonds, which have 7.25% interest, were assumed in Sabine’s 2014 merger with Forest Oil Corp. of Denver (OGJ Online, May 6, 2014).
On June 15, Sabine said talks continue with creditors. Sabine has hired financial and legal advisers to look into strategic alternatives.
Financial statements indicate Sabine has $276.9 million in cash but also more than $2 billion in long-term outstanding debt.
Sabine’s current operations are in the Cotton Valley sand and Haynesville shale in East Texas, the South Texas Eagle Ford shale, the Granite Wash in the Texas Panhandle and the North Louisiana Haynesville.