JACKSON, Miss. (AP) — One of the oil companies most active in drilling wells in the Tuscaloosa Marine Shale formation in Mississippi and Louisiana has sought bankruptcy protection.
Houston-based Goodrich Petroleum filed for Chapter 11 bankruptcy Friday after securities owners rejected swapping their holdings for common stock to lower debt payments. The company cites $99 million in assets against $507 million in debts.
Law firm Haynes & Boone says 60 North American petroleum companies have sought bankruptcy since 2014.
Goodrich says it wants to shed $400 million in debt during restructuring, pre-negotiated with creditors owning $175 million in debt. Those secured creditors would get new stock, while the company would pay nothing to owners of $224 million in unsecured debt.
The company also has interests in the Haynesville Shale gas fields of northwest Louisiana and east Texas, with a total of 193 wells across eight states.
Law firm Haynes & Boone says nearly 60 North American oil and natural gas companies have sought bankruptcy since 2014.
Goodrich is a small player in the oil world, and had focused on developing the Tuscaloosa shale formation. Wells in that region of southwest Mississippi and the Florida Parishes of Louisiana were among the highest-cost oil wells being drilled when prices began to fall, and drilling activity quickly dwindled. A number of wells were drilled but not hydraulically fractured, as companies wait for higher prices to start pumping.
Chief Operating Officer Robert Turnham, in court papers, said the plunge in oil prices punctured company finances. While Goodrich was getting $105 a barrel for Tuscaloosa Marine Shale crude in 2013, it got less than $50 per barrel last year.
Goodrich wants a federal bankruptcy judge to approve a plan cutting debt to $40 million and reducing interest payments by more than $30 million a year. Junior debtholders would have to approve.
The company says that after restructuring, it would mainly spend to increase gas output in the Haynesville formation, spending a smaller share of exploration dollars in the Tuscaloosa Marine Shale. Goodrich would remain a publicly held company and current managers would stay.
The company says royalty payments won't be interrupted. Goodrich has lease interests in hundreds of thousands of undrilled acres in Louisiana and Mississippi, but a substantial fraction of those leases will expire this year if the company doesn't drill.