Houston-dependent agreement drilling organization Diamond Offshore submitted for Chapter eleven individual bankruptcy protection in Texas on Sunday. The organization cited a fall in need due to the ongoing coronavirus pandemic and the oil value war in between OPEC and Russia. The organization also mentioned the market for its providers “worsened precipitously” this yr.
“After a very careful and diligent evaluate of our economic alternate options, [we] concluded that the finest path ahead for Diamond and its stakeholders is to seek Chapter eleven protection,” main executive officer Marc Edwards mentioned. “Through this approach, we intend to restructure our harmony sheet to obtain a a lot more sustainable personal debt stage to reposition the business for extensive-expression good results.”
Diamond has posted losses totaling $one.2 billion around the past 5 yrs. It recorded losses in four of the past 5 yrs. In 2017, it recorded a gain of $18 million. It dropped $357 million past yr.
Diamond Offshore is the fifth publicly traded oil organization to file for individual bankruptcy in the past thirty times as oil need carries on to fall, according to BankruptcyData.com. Continuous crude oil futures fell 22.six% in early trading Monday morning.
The organization mentioned it experienced about $2 billion in extensive-expression personal debt as of Dec. 31, compared to $156 million in funds. It stated Financial institution of New York Mellon as its biggest creditor, with a put together $2 billion in promises. Its 2nd-biggest creditor, Nationwide Oilwell Varco, experienced about $six.2 million in promises.
“Diamond intends to use the proceedings to restructure and improve its harmony sheet and obtain a a lot more sustainable personal debt profile, although continuing to concentrate on harmless, reliable, and efficient agreement drilling providers for its world wide clients,” the organization mentioned in a statement.
The organization, which has sizeable functions in the Gulf of Mexico, mentioned it experienced sufficient money to fund functions through the reorganization. Hess and Occidental Petroleum are amongst its biggest prospects.
Diamond’s share value fell sixty one% Monday morning before trading was halted.