Houston-dependent deal drilling company Diamond Offshore filed for Chapter eleven personal bankruptcy defense in Texas on Sunday. The company cited a fall in demand from customers thanks to the ongoing coronavirus pandemic and the oil cost war involving OPEC and Russia. The company also explained the industry for its expert services “worsened precipitously” this year.
“After a careful and diligent assessment of our fiscal alternatives, [we] concluded that the finest path ahead for Diamond and its stakeholders is to find Chapter eleven defense,” chief government officer Marc Edwards explained. “Through this procedure, we intend to restructure our balance sheet to accomplish a more sustainable credit card debt degree to reposition the small business for prolonged-term success.”
Diamond has posted losses totaling $1.2 billion around the final 5 years. It recorded losses in 4 of the final 5 years. In 2017, it recorded a gain of $18 million. It dropped $357 million final year.
Diamond Offshore is the fifth publicly traded oil company to file for personal bankruptcy in the final 30 times as oil demand from customers proceeds to fall, according to BankruptcyData.com. Steady crude oil futures fell 22.6% in early buying and selling Monday morning.
The company explained it had about $2 billion in prolonged-term credit card debt as of Dec. 31, compared to $156 million in hard cash. It shown Bank of New York Mellon as its most significant creditor, with a put together $2 billion in promises. Its second-most significant creditor, Nationwide Oilwell Varco, had about $6.2 million in promises.
“Diamond intends to use the proceedings to restructure and strengthen its balance sheet and accomplish a more sustainable credit card debt profile, although continuing to concentrate on secure, reputable, and efficient deal drilling expert services for its worldwide clients,” the company explained in a assertion.
The company, which has sizeable functions in the Gulf of Mexico, explained it had ample funds to fund functions for the duration of the reorganization. Hess and Occidental Petroleum are amongst its most significant prospects.
Diamond’s share cost fell sixty one% Monday morning prior to buying and selling was halted.