Houston-centered agreement drilling organization Diamond Offshore filed for Chapter 11 individual bankruptcy security in Texas on Sunday. The organization cited a drop in desire due to the ongoing coronavirus pandemic and the oil value war in between OPEC and Russia. The organization also explained the market place for its solutions “worsened precipitously” this year.
“After a thorough and diligent critique of our fiscal solutions, [we] concluded that the most effective route forward for Diamond and its stakeholders is to request Chapter 11 security,” chief executive officer Marc Edwards explained. “Through this system, we intend to restructure our harmony sheet to achieve a far more sustainable personal debt amount to reposition the business for lengthy-phrase accomplishment.”
Diamond has posted losses totaling $one.2 billion over the past five a long time. It recorded losses in four of the past five a long time. In 2017, it recorded a earnings of $18 million. It shed $357 million past year.
Diamond Offshore is the fifth publicly traded oil organization to file for individual bankruptcy in the past thirty days as oil desire proceeds to drop, according to BankruptcyData.com. Constant crude oil futures fell 22.six% in early investing Monday morning.
The organization explained it had about $2 billion in lengthy-phrase personal debt as of Dec. 31, as opposed to $156 million in dollars. It shown Financial institution of New York Mellon as its largest creditor, with a put together $2 billion in claims. Its 2nd-largest creditor, National Oilwell Varco, had about $six.2 million in claims.
“Diamond intends to use the proceedings to restructure and bolster its harmony sheet and achieve a far more sustainable personal debt profile, even though continuing to concentrate on secure, trusted, and productive agreement drilling solutions for its worldwide shoppers,” the organization explained in a assertion.
The organization, which has significant operations in the Gulf of Mexico, explained it had sufficient money to fund operations all through the reorganization. Hess and Occidental Petroleum are amongst its largest consumers.
Diamond’s share value fell 61% Monday morning prior to investing was halted.