Venoco Inc. has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the District of Delaware.
The Denver independent, whose primary focus is southern California, reached an agreement last week whereby its lenders will support a restructuring plan that will eliminate $1 billion of debt from its balance sheet.
“While we continue to be in a strong cash position, the declining price of oil and the ongoing closure of Plains All American Pipeline 901 continue to be serious problems,” Mark DePuy, Venoco chief executive officer, explained amid the Mar. 18 filing.
Plains All American Pipeline LP’s Coastal Line crude pipeline ruptured on May 19 in Santa Barbara, Calif., stopping production on Venoco’s Platform Holly at South Ellwood field in the Santa Barbara Channel (OGJ Online, May 26, 2015).
The firm says it has sufficient liquidity to continue its normal oil and gas activities and meet ongoing financial and regulatory obligations. Upon approval by the Bankruptcy Court, existing liquidity and generated cash from ongoing operations will be used to support the firm during the restructuring process.
Venoco founder Tim Marquez will remain executive chairman during the restructuring process. The company’s senior lenders have retained him to provide leadership and strategic counsel to the company after the company emerges from restructuring.
In addition to Platform Holly, Venoco operates two other offshore platforms in the Santa Barbara Channel, holds nonoperated interests in three other platforms, and operates onshore properties in southern California.