Phones Answered 24 Hours A Day Call 800-653-2243
Thompson Law Group, P.C.
Experienced Lawyers on Your Side
Menu / Navigate
Secondary Nav

Shale oil company considers bankruptcy amidst revenue slump

The steep slide in oil prices has affected the shale oil industry in the United States. Several of the high-profile companies in the industry may consider bankruptcy reorganization or even liquidation. The industry has a fair share of companies operating in the Pennsylvania shale fields.

One of the highest profile companies, SandRidge Energy Inc., confirmed that it has hired consultants to make a decision on a bankruptcy filing. The consultants will assist in putting together a plan for either a private restructuring or a reorganization under Chapter 11 of the bankruptcy laws. In a securities filing, the company admitted to substantial doubt about its financial stability.

The tight market has hit revenues and seriously decreased oil and gas production. SandRidge and other companies have had to pull back their plans for new drilling projects, which creates a substantial drop in output. The company has had to sell off some assets and has exercised job-cutting measures. The Oklahoma-based company is about $3.6 billion in debt.

The company was a pioneer in the fracking boom, but its stock has gone from more than $60 per share to 10 cents. It is unclear at this time whether the company can raise enough financing in the bankruptcy to survive. It does not appear that there is a good prospect for increased revenue in the near run. If a healthy reorganization cannot be engineered, the company will at some point have to convert the Chapter 11 to a Chapter 7 liquidation proceeding.

Pennsylvania companies in the shale oil industry can also consider filing for reorganization under the bankruptcy laws. If the circumstances do not point to a possibility of reorganizing the debt structure sufficiently to emerge from bankruptcy, a company will likely have to turn to liquidation. In some instances, a stabilization of the industry may assist companies that are in bankruptcy to more easily reorganize and regain a viable position in the industry.

Source: reuters.com, "SandRidge eyes bankruptcy, restructuring in U.S. shale bust", Arathy S Nair and Terry Wade, March 30, 2016

No Comments

Leave a comment
Comment Information

Contact the Firm

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Warrendale Office
Main Office
125 Warrendale-Bayne Road
Suite 200
Warrendale, PA 15086

Toll Free: 800-653-2243
Map & Directions

Pittsburgh Office
DOWNTOWN PITTSBURGH
555 Grant Street Suite 331
Pittsburgh, PA 15219

Toll Free: 800-653-2243
Toll Free: 800-653-2243
Map & Directions

Greensburg Office
GREENSBURG OFFICE
101 North Main Street, Suite 104-A
Greensburg, PA 15601

Toll Free: 800-653-2243
Toll Free: 800-653-2243
Map & Directions

Canonsburg Office
Satellite Office
2400 Ansys Drive
Canonsburg, PA 15317

Toll Free: 800-653-2243
Map & Directions

Monroeville/Wilkins Township office
Satellite Office
400 Penn Center Boulevard
Suite 101
Pittsburgh, PA 15235

Toll Free: 800-653-2243
Map & Directions